# EUR-Lex - 52013PC0433 - EN

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# 52013PC0433

**Proposal for a COUNCIL DECISION on the conclusion of the Voluntary Partnership Agreement between the European Union and the Republic of Indonesia on forest law enforcement, governance and trade in timber products to the European Union /* COM/2013/0433 final - 2013/0205 (NLE) */**

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EXPLANATORY MEMORANDUM

The Action Plan on Forest Law Enforcement,
Governance and Trade (FLEGT)[1],
endorsed by the Council in 2003[2],
proposes a set of measures, including support for timber-producing countries,
multilateral collaboration to tackle trade in illegal timber, support for
private-sector initiatives, and measures to discourage investment in activities
that encourage illegal logging. The cornerstone of the Action Plan is the
establishment of FLEGT partnerships between the EU and timber-producing countries,
aimed at putting a stop to illegal logging. In 2005 the Council adopted
Regulation (EC) No 2173/2005[3]
establishing a mechanism to verify the legality of timber imported into the EU
under the FLEGT partnerships.

In December 2005 the Council authorised the
Commission to negotiate FLEGT partnership agreements with timber-producing
countries[4].

The Commission entered into negotiations
with Indonesia in January 2007. The Commission was assisted by a number of
Member States, in particular the UK, which provided resources to facilitate the
process in Indonesia. The Commission has kept the Council updated on progress,
with reports to the Working Party on Forests as well as to EU Embassies in
Indonesia.

The Agreement addresses all the elements of
the negotiating directives adopted by the Council. In particular, it
establishes the framework, institutions and systems for the FLEGT licensing
scheme. It sets out the framework for monitoring legal compliance and for
independent auditing of the system. These are set out in annexes to the
Agreement, which provide a detailed description of the structures that will
underpin the assurance of legality afforded by a FLEGT licence.

The Voluntary Partnership Agreement (VPA)
focuses on governance and law enforcement and, by means of the licensing
system, provides the assurance that Indonesia's timber is legally produced. It
represents a major commitment by Indonesia to address the persistent problem of
illegal logging. The FLEGT licence will reassure the EU market that Indonesian
timber products are from verified legal sources.

The legislation for which compliance must
be verified has been identified following an extensive stakeholder consultation
process within Indonesia. Indonesia will work with an independent auditor, which
will provide regular, public reports on the effectiveness of the system. The
Agreement also aims to increase transparency in the sector, including through
the application of Freedom of Information legislation in Indonesia.

The Agreement goes beyond the limited
product coverage proposed in Annex II to Regulation (EC) No 2173/2005
on the FLEGT scheme and covers a wide range of exported timber products.

The Agreement makes provision for import
controls at the EU’s borders, as provided for in Regulation (EC)
No 2173/2005 on the FLEGT scheme and Regulation (EC) No 1024/2008
laying down detailed measures for implementing it. The Agreement includes a
description of Indonesia's FLEGT licence, which uses the format prescribed in
the above-mentioned Regulation.

The Agreement establishes a mechanism for
dialogue and cooperation with the EU on the FLEGT scheme, via the Joint
Implementation Committee. It also establishes principles of stakeholder
participation, social safeguards, accountability and transparency, and
monitoring of and reporting on implementation of the Agreement.

The FLEGT licensing scheme is expected to
be fully operational by late 2013. The licensing scheme will be assessed
against the criteria laid down in the Agreement before the EU begins accepting
FLEGT licences.

2013/0205 (NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Voluntary
Partnership Agreement between the European Union and the Republic of Indonesia
on forest law enforcement, governance and trade in timber products to the
European Union

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular the first subparagraphs of
Article 207(3) and (4), in conjunction with Article 218(6)(a)(v) and
218(7), thereof,

Having regard to the proposal from the
European Commission,

Having regard to the consent of the
European Parliament[5],

Whereas:

(1)       In May 2003 the European
Commission adopted a Communication to the European Parliament and to the
Council entitled ‘Forest Law Enforcement, Governance and Trade (FLEGT):
Proposal for an EU Action Plan’[6]
which called for measures to address illegal logging by developing voluntary
partnership Agreements with timber-producing countries. Council conclusions on
that Action Plan were adopted in October 2003[7]
and Parliament adopted a resolution on the subject on 11 July 2005[8].

(2)       In accordance with Council
Decision No 2011/EU XXX of [...][9],
the Voluntary Partnership Agreement between the European Union and the Republic
of Indonesia on forest law enforcement, governance and trade in timber products
to the European Union (hereinafter referred to as ‘the Agreement’) was signed
on [...][10],
subject to its conclusion.

(3)       The Agreement should be
concluded,

HAS ADOPTED THIS DECISION:

Article 1

The Agreement between the European Union
and the Republic of Indonesia on forest law enforcement, governance and trade
in timber products to the European Union is hereby approved on behalf of the
Union.

The text of the Agreement is attached to
this Decision.

Article 2

The President of the Council shall
designate the person(s) empowered to give, on behalf of the Union, the
notification provided for in Article 23 of the Agreement, in order to
express the consent of the Union to be bound by the Agreement.

Article 3

The Commission shall represent the Union in
the Joint Implementation Committee set up in accordance with Article 14 of
the Agreement.

The Member States may participate in
meetings of the Joint Implementation Committee as members of the Union
delegation.

Article 4

For the purpose of amending the annexes to
the Agreement pursuant to Article 22 thereof, the Commission is
authorised, in accordance with the procedure laid down in Article 11(3) of
Regulation (EC) No 2173/2005, to approve any such amendments on behalf of
the Union.

Article 5

This Decision shall enter into force on the
day of its adoption.

Article 6

This Decision shall be published in the Official
Journal of the European Union.

Done at Brussels,

For
the Council

The
President
                                                                       [...]

ANNEX

VOLUNTARY PARTNERSHIP AGREEMENT
BETWEEN THE EUROPEAN UNION AND THE REPUBLIC OF INDONESIA ON FOREST LAW
ENFORCEMENT, GOVERNANCE AND TRADE IN TIMBER PRODUCTS INTO THE EUROPEAN UNION

THE EUROPEAN UNION

hereinafter referred to as “the Union”

and

THE REPUBLIC OF INDONESIA

hereinafter referred to as “Indonesia”

hereinafter referred to together as the
“Parties”,

RECALLING The Framework Agreement on
Comprehensive Partnership and Cooperation between the Republic of Indonesia and
the European Community signed on 9 November 2009 in Jakarta;

CONSIDERING the close working relationship
between the Union and Indonesia, particularly in the context of the 1980
Cooperation Agreement between the European Economic Community and Indonesia,
Malaysia, the Philippines, Singapore and Thailand - member countries of the
Association of South-East Asian Nations;

RECALLING the commitment made in the Bali
Declaration on Forest Law Enforcement and Governance (FLEG) of 13 September
2001 by countries from the East Asian and other regions to take immediate
action to intensify national efforts and to strengthen bilateral, regional and
multilateral collaboration to address violations of forest law and forest
crime, in particular illegal logging, associated illegal trade and corruption,
and their negative effects on the rule of law;

NOTING the Communication from the
Commission to the Council and the European Parliament on a European Union
Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT) as a first
step towards tackling the urgent issue of illegal logging and associated trade;

REFERRING to the Joint Statement between
the Minister of Forestry of the Republic of Indonesia and the European
Commissioners for Development and for Environment signed on 8 January 2007 in
Brussels;

HAVING REGARD to the 1992 Non-Legally
Binding Authoritative Statement of Principles for a Global Consensus on the
management, conservation and sustainable development of all types of forests,
and to the adoption by the United Nations General Assembly of the Non Legally
Binding Instrument on all types of forest;

AWARE of the importance of principles set
out in the 1992 Rio Declaration on Environment and Development in the context
of securing sustainable forest management, and in particular of Principle 10
concerning the importance of public awareness and participation in
environmental issues and of Principle 22 concerning the vital role of
indigenous people and other local communities in environmental management and
development;

RECOGNISING efforts by the Government of the
Republic of Indonesia to promote good forestry governance, law enforcement and
the trade in legal timber, including through the Sistem Verifikasi Legalitas
Kayu (SVLK) as the Indonesian Timber Legality Assurance System (TLAS) which is
developed through a multi-stakeholder process following the principles of good
governance, credibility and representativeness;

RECOGNISING that the Indonesian TLAS is
designed to ensure the legal compliance of all timber products;

RECOGNISING that implementation of a FLEGT
Voluntary Partnership Agreement will reinforce sustainable forest management
and contribute to combating climate change through reduced emissions from
deforestation and forest degradation and the role of conservation, sustainable
management of forest and enhancement of forest carbon stocks (REDD+);

HAVING REGARD to the Convention on
International Trade in Endangered Species of Wild Fauna and Flora (CITES) and
in particular the requirement that export permits issued by parties to CITES
for specimens of species listed in Appendices I, II or III be granted only
under certain conditions, including that such specimens were not obtained in
contravention of the laws of that party for the protection of fauna and flora;

RESOLVED that the Parties shall seek to
minimise any adverse impacts on indigenous and local communities and poor
people which may arise as a direct consequence of implementing this Agreement;

CONSIDERING the importance attached by the
Parties to development objectives agreed at international level and to the
Millennium Development Goals of the United Nations;

CONSIDERING the importance attached by the
Parties to the principles and rules which govern the multilateral trading
systems, in particular the rights and obligations laid down in the General Agreement
on Tariffs and Trade (GATT) 1994 and in other multilateral agreements
establishing the World Trade Organisation (WTO) and the need to apply them in a
transparent and non-discriminatory manner;

HAVING REGARD to Council Regulation (EC) No
2173/2005 of 20 December 2005 on the establishment of a FLEGT licensing scheme
for imports of timber into the European Community and to Regulation (EU) No
995/2010 of the European Parliament and of the Council of 20 October 2010
laying down the obligations of operators who place timber and timber products
on the market;

REAFFIRMING the principles of mutual
respect, sovereignty, equality and non-discrimination and recognising the
benefits to the Parties arising from this Agreement;

PURSUANT to the respective laws and regulations
of the Parties;

HEREBY AGREE AS FOLLOWS:

Article 1

Objective

1.           The objective of this
Agreement, consistent with the Parties’ common commitment to the sustainable
management of all types of forest, is to provide a legal framework aimed at
ensuring that all imports into the Union from Indonesia of timber products
covered by this Agreement have been legally produced and in doing so to promote
trade in timber products.

2.           This Agreement also
provides a basis for dialogue and co-operation between the Parties to
facilitate and promote the full implementation of this Agreement and enhance
forest law enforcement and governance.

Article 2

Definitions

For the purposes of this Agreement, the
following definitions shall apply:

(a)
‘import into the Union’ means the release for
free circulation of timber products in the Union within the meaning of Article
79 of Regulation (EEC) No 2913/1992 of 12 October 1992 establishing the Union
Customs Code which cannot be qualified as 'goods of a non-commercial nature' as
defined in Article 1(6) of Commission Regulation (EEC) No 2454/93 of 2 July
1993 laying down provisions for the implementation of Council Regulation (EEC)
No 2913/1992 establishing the Union Customs Code;

(b)
 ‘export’ means the physical leaving or taking
out of timber products from any part of the geographical territory of
Indonesia;

(c)
 ‘timber products’ means the products listed in
Annex IA and Annex IB;

(d)
'HS Code' means a four- or six-digit commodity
code as set out in the Harmonised Commodity Description and Coding System
established by the International Convention on the Harmonised Commodity
Description and Coding System of the World Customs Organisation;

(e)
‘FLEGT licence’ means an Indonesian Verified Legal
(V-Legal) document which confirms that a shipment of timber products intended
for export to the Union has been legally produced. A FLEGT licence may be in
paper or electronic form;

(f)
 ‘licensing authority’ means the entities
authorised by Indonesia to issue and validate FLEGT licences;

(g)
‘competent authorities’ means the authorities
designated by the Member States of the Union to receive, accept and verify
FLEGT licences;

(h)
 ‘shipment’ means a quantity of timber products
covered by a FLEGT licence that is sent by a consignor or a shipper from
Indonesia and is presented for release for free circulation at a customs office
in the Union;

(i)
 ‘legally-produced timber’ means timber products
harvested or imported and produced in accordance with the legislation as set
out in Annex II.

Article 3

FLEGT Licensing Scheme

1.           A Forest Law Enforcement,
Governance and Trade licensing scheme’ (hereinafter ‘FLEGT Licensing Scheme’)
is hereby established between the Parties to this Agreement. It establishes a
set of procedures and requirements aiming at verifying and attesting, by means
of FLEGT licences, that timber products shipped to the Union were legally
produced. In accordance with Council Regulation 2173/2005 of 20 December 2005,
the Union shall only accept such shipments from Indonesia for import into the
Union if they are covered by FLEGT licences.

2.           The FLEGT Licensing Scheme
shall apply to the timber products listed in Annex IA.

3.           The timber products listed
in Annex 1B may not be exported from Indonesia and may not be FLEGT licensed.

4.           The Parties agree to take
all necessary measures to implement the FLEGT Licensing Scheme in accordance
with the provisions of this Agreement.

Article 4

Licensing Authorities

1.           The Licensing Authority
will verify that timber products have been legally produced in accordance with
the legislation identified in Annex II. The Licensing Authority will issue
FLEGT licences covering shipments of legally-produced timber products for
export to the Union.

2.           The Licensing Authority
shall not issue FLEGT licences for any timber products that are composed of, or
include, timber products imported into Indonesia from a third country in a form
in which the laws of that third country forbid export, or for which there is
evidence that those timber products were produced in contravention of the laws
of the country where the trees were harvested.

3.           The Licensing Authority
will maintain and make publicly available its procedures for issuing FLEGT licences.
The Licensing Authority will also maintain records of all shipments covered by
FLEGT licences and consistent with national legislation concerning data
protection will make these records available for the purposes of independent
monitoring, while respecting the confidentiality of exporters’ proprietary
information.

4.           Indonesia shall establish
a Licence Information Unit that will serve as a contact point for
communications between the competent authorities and the Licensing Authorities
as set out in Annexes III and V.

5.           Indonesia shall notify
contact details of the Licensing Authority and the Licence Information Unit to
the European Commission. The Parties shall make this information available to
the public.

Article 5

Competent Authorities

1.           The competent authorities
shall verify that each shipment is covered by a valid FLEGT licence before
releasing that shipment for free circulation in the Union. The release of the
shipment may be suspended and the shipment detained if there are doubts
regarding the validity of the FLEGT licence.

2.           The competent authorities
shall maintain and publish annually a record of FLEGT licences received.

3.           The competent authorities
shall grant persons or bodies designated as independent market monitor access
to the relevant documents and data, in accordance with their national
legislation on data protection.

4.           The competent authorities
shall not perform the action described in Article 5(1) in the case of a
shipment of timber products derived from species listed under the Appendices of
the CITES as these are covered by the provisions for verification set out in
the Council Regulation (EC) No 338/97 of 9 December 1996 on the protection of
species of wild fauna and flora by regulating trade therein.

5.           The European Commission
shall notify Indonesia of the contact details of the competent authorities. The
Parties shall make this information available to the public.

Article 6

FLEGT Licences

1.           FLEGT licences shall be
issued by the Licensing Authority as a means of attesting that timber products
have been legally produced.

2.           The FLEGT licence shall be
laid out and completed in English.

3.           The Parties may, by
agreement, establish electronic systems for issuing, sending and receiving
FLEGT licences.

4.           The technical
specifications of the licence are set out in Annex IV. The procedure for
issuing FLEGT licences is set out in Annex V.

Article 7

Verification of Legally-Produced Timber

1.           Indonesia shall implement
a TLAS to verify that timber products for shipment have been legally produced
and to ensure that only shipments verified as such are exported to the Union.

2.           The system for verifying
that shipments of timber products have been legally produced is set out in
Annex V.

Article 8

Release of Shipments covered by a FLEGT
Licence

1.           The procedures governing
release for free circulation in the Union for shipments covered by a FLEGT
licence are described in Annex III.

2.           Where the competent authorities
have reasonable grounds to suspect that a licence is not valid or authentic or
does not conform to the shipment it purports to cover, the procedures contained
in Annex III may be applied.

3.           Where persistent disagreements
or difficulties arise in consultations concerning FLEGT licences the matter may
be referred to the Joint Implementation Committee.

Article 9

Irregularities

The Parties shall inform each other if they
suspect or have found evidence of any circumvention or irregularity in the
FLEGT Licensing Scheme, including in relation to the following:

(a)
 circumvention of trade, including by
re-direction of trade from Indonesia to the Union via a third country;

(b)
FLEGT licences covering timber products which
contain timber from third countries that is suspected of being illegally
produced; or

(c)
fraud in obtaining or using FLEGT licences.

Article 10

Application of the Indonesian TLAS and Other
Measures

1.           Using the Indonesian TLAS,
Indonesia shall verify the legality of timber exported to non-Union markets and
timber sold on domestic markets, and shall endeavour to verify the legality of
imported timber products using, where possible, the system developed for
implementing this Agreement.

2.           In support of such
endeavours, the Union shall encourage the use of the abovementioned system with
respect to trade in other international markets and with third countries.

3.           The Union shall implement
measures to prevent the placing on the Union market of illegally-harvested
timber and products derived therefrom.

Article 11

Stakeholder Involvement in the
Implementation of the Agreement

1.           Indonesia will hold
regular consultations with stakeholders on the implementation of this Agreement
and will in that regard promote appropriate consultation strategies, modalities
and programmes.

2.           The Union will hold
regular consultations with stakeholders on the implementation of this
Agreement, taking into account its obligations under the 1998 Convention on
Access to Information, Public Participation in Decision-making and Access to
Justice in Environmental Matters (Aarhus Convention)

Article 12

Social Safeguards

1.           In order to minimize
possible adverse impacts of this Agreement, the Parties agree to develop a
better understanding of the impacts on the timber industry as well as on the
livelihoods of potentially affected indigenous and local communities as
described in their respective national laws and regulations.

2.           The Parties will monitor
the impacts of this Agreement on those communities and other actors identified
in paragraph 1, while taking reasonable steps to mitigate any adverse impacts.
The Parties may agree on additional measures to address adverse impacts.

Article 13

Market Incentives

Taking into account its international
obligations, the Union shall promote a favourable position in the Union market
for the timber products covered by this Agreement. Such efforts will include in
particular measures to support:

(a)
public and private procurement policies that
recognise a supply of and ensure a market for legally harvested timber
products; and

(b)
a more favourable perception of FLEGT-licensed
products on the Union market.

Article 14

Joint Implementation Committee

1.           The Parties shall
establish a joint mechanism (hereinafter referred to as the "Joint
Implementation Committee" or "JIC"), to consider issues relating
to the implementation and review of this Agreement.

2.           Each Party shall nominate
its representatives on the JIC which shall take its decisions by consensus. The
JIC shall be co-chaired by senior officials; one from the Union and the other
from Indonesia.

3.           The JIC shall establish
its rules of procedure.

4.           The JIC shall meet at
least once a year, on a date and with an agenda which are agreed in advance by
the Parties. Additional meetings may be convened at the request of either of
the Parties.

5.           The JIC shall:

(a)
consider and adopt joint measures to implement
this Agreement;

(b)
review and monitor the overall progress in
implementing this Agreement including the functioning of the TLAS and market-related
measures, on the basis of the findings and reports of the mechanisms
established under Article 15;

(c)
assess the benefits and constraints arising from
the implementation of this Agreement and decide on remedial measures;

(d)
examine reports and complaints about the
application of the FLEGT licensing scheme in the territory of either of the
Parties;

(e)
agree on the date from which the FLEGT licensing
scheme will start operating after an evaluation of the functioning of the TLAS
on the basis of the criteria set out in Annex VIII;

(f)
identify areas of cooperation to support the
implementation of this Agreement;

(g)
establish subsidiary bodies for work requiring
specific expertise, if necessary;

(h)
prepare, approve, distribute, and make public
annual reports, reports of its meetings and other documents arising out of its
work.

(i)
perform any other tasks it may agree to carry
out.

Article 15

Monitoring and Evaluation

The Parties agree to use the reports and
findings of the following two mechanisms to evaluate the implementation and
effectiveness of this Agreement.

(a)
Indonesia, in consultation with the Union, shall
engage the services of a Periodic Evaluator to implement the tasks as set out
in Annex VI.

(b)
the Union, in consultation with Indonesia, shall
engage the services of an Independent Market Monitor to implement the tasks as
set out in Annex VII.

Article 16

Supporting Measures

1.           The provision of any
resources necessary for measures to support the implementation of this
Agreement, identified pursuant to Article 14(5) (f) above shall be determined
in the context of the programming exercises of the Union and its Member States
for cooperation with Indonesia.

2.           The Parties shall ensure
that activities associated with the implementation of this Agreement are
coordinated with existing and future development programmes and initiatives.

Article 17

Reporting and Public Disclosure of
Information

1.           The Parties shall ensure
that the workings of the JIC are as transparent as possible. Reports arising
out of its work shall be jointly prepared and made public.

2.           The JIC shall make public
a yearly report that includes inter alia, details on:

(a)
quantities of timber products exported to the
Union under the FLEGT licensing scheme, according to the relevant HS Heading;

(b)
the number of FLEGT licences issued by
Indonesia;

(c)
progress in achieving the objectives of this
Agreement and matters relating to its implementation;

(d)
actions to prevent illegally-produced timber
products being exported, imported, and placed or traded on the domestic market;

(e)
quantities of timber and timber products
imported into Indonesia and actions taken to prevent imports of
illegally-produced timber products and maintain the integrity of the FLEGT
Licensing Scheme;

(f)
cases of non-compliance with the FLEGT Licensing
Scheme and the action taken to deal with them;

(g)
quantities of timber products imported into the
Union under the FLEGT licensing scheme, according to the relevant HS Heading
and Union Member State in which importation into the Union took place;

(h)
the number of FLEGT licences received by the
Union;

(i)
the number of cases and quantities of timber
products involved where consultations took place under Article 8(2).

3.           In order to achieve the
objective of improved governance and transparency in the forest sector and to
monitor the implementation and impacts of this Agreement in both Indonesia and
the Union, the Parties agree that the information as described in Annex IX
shall be made publicly available.

4.           The Parties agree not to
disclose confidential information exchanged under this Agreement, in accordance
with their respective legislation. Neither Party shall disclose to the public,
nor permit its authorities to disclose, information exchanged under this
Agreement concerning trade secrets or confidential commercial information.

Article 18

Communication on Implementation

1.           The representatives of the
Parties responsible for official communications concerning implementation of
this Agreement shall be:

For Indonesia:            For the Union:

The Director-General of Forest           The
Head of Delegation           
Utilisation, Ministry for Forestry          of the European Union in Indonesia

2.           The Parties shall
communicate to each other in a timely manner the information necessary for
implementing this Agreement, including changes in paragraph 1

Article 19

Territorial Application

This Agreement shall apply to the territory
in which the Treaty on the Functioning of the European Union is applied under
the conditions laid down in that Treaty, on the one hand, and to the territory
of Indonesia, on the other.

Article 20

Settlement of Disputes

1.           The Parties shall seek to
resolve any dispute concerning the application or interpretation of this
Agreement through prompt consultations.

2.           If a dispute has not been
settled by means of consultations within two months from the date of the
initial request for consultations either Party may refer the dispute to the JIC
which shall endeavour to settle it. The JIC shall be provided with all relevant
information for an in depth examination of the situation with a view to finding
an acceptable solution. To this end, the JIC shall be required to examine all
possibilities for maintaining the effective implementation of this Agreement.

3.           In the event that the JIC
is unable to settle the dispute within two months, the Parties may jointly seek
the good offices of, or request mediation by, a third party.

4.           If it is not possible to
settle the dispute in accordance with paragraph 3, either Party may notify the
other of the appointment of an arbitrator; the other Party must then appoint a
second arbitrator within thirty calendar days of the appointment of the first
arbitrator. The Parties shall jointly appoint a third arbitrator within two
months of the appointment of the second arbitrator.

5.           The arbitrators decisions
shall be taken by majority vote within six months of the third arbitrator being
appointed.

6.           The award shall be binding
on the Parties and it shall be without appeal.

7.           The JIC shall establish
the working procedures for arbitration.

Article 21

Suspension

1.           A Party wishing to suspend
this Agreement shall notify the other Party in writing of its intention to do
so. The matter shall subsequently be discussed between the Parties.

2.           Either Party may suspend
the application of this Agreement. The decision on suspension and the reasons
for that decision shall be notified to the other Party in writing.

3.           The conditions of this
Agreement will cease to apply thirty calendar days after such notice is given.

4.           Application of this
Agreement shall resume thirty calendar days after the Party that has suspended
its application informs the other Party that the reasons for the suspension no
longer apply.

Article 22

Amendments

1.           Either Party wishing to
amend this Agreement shall put the proposal forward at least three months
before the next meeting of the JIC. The JIC shall discuss the proposal and if
consensus is reached, it shall make a recommendation. If the Parties agree with
the recommendation, they shall approve it in accordance with their respective
internal procedures.

2.           Any amendment so approved
by the Parties shall enter into force on the first day of the month following
the date on which the Parties notify each other of the completion of the
procedures necessary for this purpose.

3.           The JIC may adopt
amendments to the Annexes to this Agreement.

4.           Notification of any
amendment shall be made to the Secretary-General of the Council of the European
Union and to the Minister for Foreign Affairs of the Republic of Indonesia
through diplomatic channels.

Article 23

Entry into Force, Duration and Termination

1.           This Agreement shall enter
into force on the first day of the month following the date on which the
Parties notify each other in writing of the completion of their respective
procedures necessary for this purpose.

2.           Notification shall be made
to the Secretary-General of the Council of the European Union and to the
Minister for Foreign Affairs of the Republic of Indonesia through diplomatic
channels

3.           This Agreement shall
remain in force for a period of five years. It shall be extended for consecutive
periods of five years, unless a Party renounces the extension by notifying the
other Party in writing at least twelve months before this Agreement expires.

4.           Either Party may terminate
this Agreement by notifying the other Party in writing. This Agreement shall
cease to apply twelve months after the date of such notification.

Article 24

Annexes

The Annexes to this Agreement shall form an
integral part thereof.

Article 25

Authentic Texts

This Agreement shall be drawn up in
duplicate in the Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French,
German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish,
Portuguese, Romanian, Slovak, Slovenian, Spanish, Swedish and Indonesian
(Bahasa Indonesia) languages, each of these texts being authentic. In case of
divergence of interpretation the English text shall prevail.

IN WITNESS WHEREOF, the undersigned, being
duly authorised thereto, have signed this Agreement.

DONE at Brussels,

For the European Union || For the Republic of Indonesia

ANNEX I

PRODUCT COVERAGE

The list in this Annex refers to the
Harmonised Commodity Description and Coding System established by the
International Convention on the Harmonised Commodity Description and Coding
System of the World Customs Union.

ANNEX IA: THE HARMONISED
COMMODITY CODES FOR TIMBER AND TIMBER PRODUCTS COVERED UNDER THE FLEGT
LICENSING SCHEME

Chapter 44:

HS CODES ||  DESCRIPTION

|| Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chips or particles; sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes, pellets or similar forms.

||

4401.21 || -    Wood in chips or particles - coniferous

4401.22 || -     Wood in chips or particles - non coniferous

Ex.4404 || -    Chipwood and the like

Ex.4407 || -     Wood sawn or chipped lengthwise, sliced or peeled, planed, sanded      or end-jointed, of a thickness exceeding 6 mm.

4408 || Sheets for veneering (including those obtained by slicing laminated wood), for plywood or for similar laminated wood and other wood, sawn lengthwise, sliced or peeled, whether or not planed, sanded, spliced or end-jointed, of a thickness not exceeding 6 mm.

|| Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V-jointed, beaded, moulded, rounded or the like) along any of its edges, ends or faces, whether or not planed, sanded or end-jointed.

4409.10 || -    Coniferous

4409.29 || -    Non-coniferous – other

4410 || Particle board, oriented strand board (OSB) and similar board (for example, waferboard) of wood or other ligneous materials, whether or not agglomerated with resins or other organic binding substances.

4411 || Fibreboard of wood or other ligneous materials, whether or not bonded with resins or other organic substances.

4412 || Plywood, veneered panels and similar laminated wood

4413 || Densified wood, in blocks, plates, strips or profile shapes.

4414 || Wooden frames for paintings, photographs, mirrors or similar objects.

4415 || Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums of wood; pallets, box pallets and other load boards, of wood; pallet collars of wood.

4416 || Casks, barrels, vats, tubs and other coopers' products and parts thereof, of wood, including staves.

4417 || Tools, tool bodies, tool handles, broom or brush bodies and handles, of wood; boot or shoe lasts and trees, of wood.

4418 || Builders' joinery and carpentry of wood, including cellular wood panels, assembled flooring panels, shingles and shakes.

Ex.4421.90 || -     Wooden paving blocks

Chapter 47:

HS CODES ||  DESCRIPTION

|| Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard:

4701 || -    Mechanical wood pulp

4702 || -    Chemical wood pulp, dissolving grades

4703 || -    Chemical wood pulp, soda or sulphate, other than dissolving     grades.

4704 || -    Chemical wood pulp, sulphite, other than dissolving grades

4705 || -    Wood pulp obtained by a combination of mechanical and     chemical pulping processes

Chapter 48:

HS CODES ||  DESCRIPTION

4802 || Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch-cards and punch tape paper, in rolls or rectangular (including square) sheets, of any size, other than paper of heading 48.01 or 48.03; hand-made paper and paperboard:

4803 || Toilet or facial tissue stock, towel or napkin stock and similar paper of a kind used for household or sanitary purposes, cellulose wadding and webs of cellulose fibres, whether or not creped, crinkled, embossed, perforated, surface -coloured, surface-decorated or printed, in rolls or sheets.

4804 || Uncoated kraft paper and paperboard, in rolls or sheets, other than that of heading 48.02 or 48.03.

4805 || Other Uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specify in Note 3 to this chapter.

4806 || Vegetable parchment, greaseproof papers, tracing papers and glassine and other glazed transparent or translucent papers, in rolls or sheets.

4807 || Composite paper and paperboard (made by sticking flat layers of paper or paperboard together with an adhesive), not surface-coated or impregnated, whether or not internally reinforced, in rolls or sheets.

4808 || Paper and paperboard, corrugated (with or without glued flat surface sheets), creped, crinkled, embossed or perforated, in rolls or sheets, other than paper of the kind described in heading 48.03.

4809 || Carbon paper, self-copy paper and other copying or transfer papers (including coated or impregnated paper for duplicator stencils or offset plates), whether or not printed, in rolls or sheets.

4810 || Paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances, with or without binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size.

4811 || Paper, paperboard, cellulose wadding and webs of cellulose fibres, coated, impregnated, covered, surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size, other than goods of the kind described in heading 48.03, 48.09 or 48.10.

4812 || Filter blocks, slabs and plates, of paper pulp.

4813 || Cigarette paper, whether or not cut to size or in the form booklets or tubes.

4814 || Wallpaper and similar wall covering; window transparencies of paper.

4816 || Carbon paper, self-copy paper and other copying or transfer papers (other than those of heading 48.09), duplicator stencils and offset plates, of paper, whether or not put up in boxes.

4817 || Envelopes, letter cards, plain postcards and correspondence cards, of paper or paper board; boxes, pouches, wallets and writing compendiums, of paper or paperboard, containing an assortment of paper stationary.

4818 || Toilet paper and similar paper, cellulose wadding or webs of cellulose fibres, of a kind used for household or sanitary purposes, in rolls of a width not exceeding 36 cm, or cut to size or shape; handkerchief, cleansing tissues, towels, tablecloths, serviettes, napkins for babies, tampons, bed sheets and similar household, sanitary or hospital articles, articles of apparel and clothing accessories, of paper pulp, paper, cellulose wadding or webs of cellulose fibres.

4821 || Paper or paperboard labels of all kinds, whether or not printed.

4822 || Bobbins, spools, cops and similar support of paper pulp, paper or paper board whether or not perforated or hardened.

4823 || Other paper, paperboard, cellulose wadding and webs cellulose fibres, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres.

Chapter 94:

HS CODES ||  DESCRIPTION

|| Other seats, with wooden frames:

9401.61. || -    Upholstered

9401.69. || -    Other

|| Other furniture and parts thereof

9403.30 || -    Wooden furniture of a kind used in offices

9403.40 || -    Wooden furniture of a kind used in the kitchen

9403.50 || -    Wooden furniture of a kind used in the bedroom

9403.60 || -    Other wooden furniture

Ex. 9406.00. || -     Pre-fabricated constructions made of wood

ANNEX IB: THE HARMONISED COMMODITY CODES
FOR TIMBER PROHIBITED FROM EXPORT UNDER INDONESIAN LAW

Chapter 44:

HS CODES || DESCRIPTION

4403 || Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared:

Ex. 4404 || -     Hoopwood; split poles; piles, pickets and stakes of wood,  pointed but not sawn lengthwise; wooden sticks, roughly     trimmed, but not turned, bent or otherwise worked, suitable for   the        manufacture of walking-sticks, umbrellas, tool handles or the      like.

4406 || Railway or tramway sleepers (cross-ties) of wood.

Ex. 4407 || -    Wood sawn or chipped lengthwise, sliced or peeled, not planed,     not sanded or not end-jointed, of a thickness exceeding 6 mm.

ANNEX II

LEGALITY DEFINITION

INTRODUCTION

Indonesian timber is deemed legal when its
origin and production process as well as subsequent processing, transport and
trade activities are verified as meeting all applicable Indonesian laws and
regulations.

Indonesia has five legality standards
articulated through a series of principles, criteria, indicators and verifiers,
all based on the underlying laws, regulations and procedures.

These five standards are:

·
Legality Standard 1: the standard for
concessions within production forest zones on state-owned lands;

·
Legality Standard 2: the standard for community
plantation forests and community forests within production forest zones on
state-owned lands;

·
Legality Standard 3: the standard for
privately-owned forests;

·
Legality Standard 4: the standard for timber
utilisation rights within non-forest zones on state-owned lands;

·
Legality Standard 5: the standard for primary
and downstream forest based industries.

These five legality standards apply to
different types of timber permits as set out in the following table:

Permit type || Description || Land ownership / resource management or utilisation || Applicable legality standard

IUPHHK-HA/HPH || Permit to utilise forest products from natural forests || State owned/ company managed || 1

IUPHHK-HTI/HPHTI || Permit to establish and manage industrial forest plantation || State owned/ company managed || 1

IUPHHK-RE || Permit for forest ecosystem restoration || State owned/ company managed || 1

IUPHHK- HTR || Permit for community forest plantations || State owned/ community managed || 2

IUPHHK-HKM || Permit for community forest management || State owned/ community managed || 2

Private Land || No permit required || Privately owned/ privately utilised || 3

IPK/ILS || Permit to utilise timber from non-forest zones || State owned/ privately utilised || 4

IUIPHHK || Permit for establishing and managing a primary processing company || Not applicable || 5

IUI Lanjutan or IPKL || Permit for establishing and managing a secondary processing company || Not applicable || 5

These five legality standards and the
associated verifiers are outlined below.

ANNEX
II - LEGALITY STANDARD 1: THE STANDARDS FOR CONCESSIONS WITHIN PRODUCTION
FOREST ZONES

No || Principles || Criteria || Indicators || Verifiers || Related Regulations[11]

1 || P1. Legal status of    area and right to utilise || K1.1 Forest management unit (concessionaires) is located within the production forest zone. || 1.1.1  Permit holder can demonstrate that the timber utilisation permit (IUPHHK) is valid || Forest concession right certificate || Government Regulation PP72/2010 Regulation of the Minister for Forestry P50/2010 Regulation of the Minister for Forestry P12/2010

Proof of payment for the timber forest product utilisation permit.

2. || . P2. Comply with the     system and    procedures for    harvesting. || K2.1    Permit holder    possesses a   harvest plan    for the cutting    area that has    been    approved by the competent    administrative    authorities. || 2.1.1 The competent administrative authority has approved the work plan documents: master plan, annual work plan, including their attachments. || The approved master plan & attachments, drawn up based on a comprehensive forest inventory conducted by technically competent staff. The approved annual work plan, drawn up based on the master plan Maps, drawn up by technically competent staff, which describe the layout and boundaries of the areas covered by the plan of work || Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P56/2009 Regulation of the Minister for Forestry P60/2011

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || || || Map indicating logging exclusion zones within the Annual Work Plan and evidence of implementation on the ground. ||

Harvesting locations (blocks or compartments) on the map are clearly marked and verified on the ground.

K2.2    Work plan is    valid || 2.2.1 Forest permit holder       has a valid work plan  in compliance with  applicable regulations || Timber forest product utilisation master plan document & attachments (ongoing applications are acceptable) . || Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P56/2009 Regulation of the Minister for Forestry P60/2011

The location and extractable volumes of natural forest logs within areas to be harvestedcorespond with the work plan.

|| || 2.2.2 Permits for all     harvesting equipment   are valid and can be     verified in the field.           (not applicable to a     state forest company) || Permit for equipment and equipment transfer || Regulation of the Minister for Forestry P53/2009

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

3. || P3. The legality of    the  transport or  the change of  ownership of  round logs. || K3.1 Permit holders ensure that all  the logs         transported         from a log yard  in the forest to      a primary forest products         industry, or         registered log     trader, including         via an         intermediate log     yard, is         physically         identified and         accompanied by  valid documents. || 3.1.1 All the large diameter           logs harvested or          commercially          extracted have been   reported in a Timber Production Report || Approved Timber Production Report documents || Regulation of the Minister for Forestry P55/2006

3.1.2 All the timber          transported out of the  permit areas is          accompanied by a    valid transport          document. || Valid transport documents and attachments accompany logs from the log yard to primary forest products industry or registered log trader , including via intermediate log yards || Regulation of the Minister for Forestry P55/2006

|| || || 3.1.3 The round logs have   been harvested in the  areas set out in the      forest utilisation          permit || Timber administration marks/barcode (PUHH) on logs. || Regulation of the Minister for Forestry P55/2006

Permit holder applies timber marking consistently

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || K3.2 Permit holder   has settled   the payment of   applicable fees   and levies for  the commercial   extraction of   timber || 3.2.1 Permit holder   shows     proof of payment of   Reforestation Fund         and/or Forest   Resources Fee,   which   corresponds to the log   production and the   applicable tariff. || Payment Orders for Reforestation Funds and/or Forest Resources Fee. || Government Regulation PP22/1997 Government Regulation PP 51/1998 Regulation of the Minister for Forestry P18/2007 Regulation of the Minister for Trade 22/M-DAG/PER/4/2012 Government Regulation PP59/1998

|| || || || Proof of Deposit made for the Payment of Reforestation Fund and/or Forest Resources Fee and the Payment Slips.

|| || || || Payment of the Reforestation Funds and/or Forest Resources Fee is consistent with log production and the applicable tariff.

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || K3.3 Inter-island   transportation   and trade || 3.3.1 Permit holders who    ship logs are          Registered Inter-  Island Timber          Traders          (PKAPT). || PKAPT documents || Regulation of the Minister for Industry and Trade 68/2003 Joint Regulation of the Minister for Forestry, Minister for Transportation, and Minister for Industry and Trade 22/2003

3.3.2   The vessel used to transport round logs        is Indonesian           flagged and           possesses a valid    permit to operate. || Registration documents which show the identity of the vessel and valid permit. || Regulation of the Minister for Industry and Trade 68/2003 Joint Regulation of the Minister for Forestry, Minister for Transportation, and Minister for Industry and Trade 22/2003

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

4. || P4. Compliance with  environmental     and social  aspects  related to  timber  harvesting || K4.1 Permit holder         has an approved         Environmental         Impact         Assessment         (EIA)         document and         has         implemented         measures         identified in it. || 4.1.1   Permit holder has           EIA documents   approved by the   competent   authorities which       cover the entire work   area. || EIA documents || Government Regulation PP27/1999 Regulation of the Minister for Forestry and Plantation 602/1998

|| || 4.1.2 Permit holder has  environmental  management plan          and environmental  monitoring plan  implementation  reports indicating the  actions taken to  mitigate  environmental  impacts and provide     social benefits. || Environmental management plan and environmental monitoring plan documents || Government Regulation PP27/1999

Proof of implementation of the environmental management plan and monitoring of significant environmental and social impacts

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

5. || P5. Compliance with labor laws and  regulations || K.5.1 Fulfilment of  occupational safety and  health (OSH)  requirements || 5.1.1 Availability of OSH procedures and their implementation || Implementation of OSH procedures || Regulation of the Minister for Manpower & Transmigration 01/1978 Regulation of the Minister for Forestry P12/2009

OSH equipment

Employment injury records

K.5.2 Fulfillment of  workers’ rights || 5.2.1 Freedom of association for workers || Workers belong to workers unions or company policies allow workers to establish or get involved in union activities || Act 21/2000 Regulation of the Minister for Manpower & Transmigration 16/2001

5.2.2 Existence of collective labour agreements || Collective labour agreement documents or company policy documents on labour rights || Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2011

5.2.3 Company does not employ minors/ underage workers || There are no underage workers || Act 13/2003 Act 23/2003 Act 20/2009

LEGALITY STANDARD 2: THE STANDARD FOR
COMMUNITY PLANTATION FORESTS AND COMMUNITY FORESTS WITHIN PRODUCTION FOREST
ZONES

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

1. || P1. Legal status of area and right to utilise || K1.1 Forest management unit is located within the production forest zone. || 1.1.1  Permit holder can demonstrate that the timber utilisation permit (IUPHHK) is valid. || Forest concession right certificate || Regulation of the Minister for Forestry P55/2011 Regulation of the Minister for Forestry P37/2007 Regulation of the Minister for Forestry P49/2008 Regulation of the Minister for Forestry P12/2010

Proof of payment for the timber forest product utilisation permit.

2. || P2. Comply with the system and procedures for harvesting || K2.1Permit holder has   a harvesting plan  for the cutting  area that has   been approved by     the competent        administrative       authorities || 2.1.1 The competent administrative authority has approved the annual work plan document. || Approved annual work plan document. || Regulation of the Minister for Forestry P62/2008

Map indicating logging exclusion zones in the anual work plan and evidence of implementation on the ground.

Harvesting block location are clearly marked and can be verified on the ground.

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || K2.2  Work plan is  valid || 2.2.1  Forest pemit holder       has a valid work plan  in compliance with  applicable  regulations. || Timber Forest Product Utilisation Master Plan document and attachments (on-going applications are acceptable) || Regulation of the Minister for Forestry P62/2008

The location and extractable volumes of logs within the area to be established to timber estate are to correspond to the work plan.

2.2.2 Permits for all   harvesting equipment  are valid and can be   physically verified in   the field. || Permits for equipment and equipment transfer. || Regulation of the Minister for Forestry P53/2009.

|| || K2.3 Permit holders ensure that all the   logs transported        from a log yard in  the forest to a   primary forest    products industry            or registered log        trader, including           via an     intermediate log    || 2.3.1 All large diameter   logs which have been  harvested or  commercially  extracted are  reported in the  Timber Production  Report. || Approved Timber Production Report documents || Regulation of the Minister for Forestry P55/2006

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| ||         yard are        physically        identified and        accompanied by     valid documents. || 2.3.2   All the logs           transported out of        the permit area are      accompanied by a    legal transport           document. || Legal transport documents and relevant attachments from the Log Yard to the Intermediate Log Yard and from Intermediate Log Yard to primary industry and/or registered log trader. || Regulation of the Minister for Forestry P55/2006

|| || || 2.3.3 The round logs have been harvested ina   the areas set out in     the forest utilisation          permit || Timber administration marks/barcode (PUHH) on logs. || Regulation of the Minister for Forestry P55/2006

Permit holder applies timber marking consistently.

|| || || 2.3.4 Permit holder can show the existence of log transport documents accompanying logs transported from log yard. || Log Transport Document to which is attached a log list document. || Regulation of the Minister for Forestry P55/2006

No || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || K2.4 Permit holder has paid applicable fees and levies required for the commercial extraction of timber || 2.4.1 Permit holders show  proof of payment of  Forest Resources Fee which  corresponds to the log  production and the  applicable tariff. || Payment Order for Forest Resources Fee || Regulation of the Minister for Forestry P18/2007 Regulation of the Minister for Trade 22/M-DAG/PER/4/2012

Proof of Payment of Forest Resources Fee

Payment of the Forest Resources Fee is consistent with log production and the applicable tariff.

3. || P3. Compliance withenvironmental and social aspects pertaining to timber harvesting || K3.1 Permit holder has  an approved  Environmental  Impact  Assessment (EIA)  document and  has implemented  measures  identified in it. || 3.1.1 Permit holder has  environmental impact  assessment  documents approved  by the competent  authorities which  cover the entire work  area. || EIA documents || Regulation of the Minister for Forestry and Plantation 622/1999

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || || 3.1.2 Permit holder has environmental management and monitoring implementation reports taken to mitigate environmental impacts and provide     social benefits. || Relevant environmental management and monitoring documents || Government Regulation PP27/1999

Proof of implementation of          environmental management      and monitoring of significant environmental and social impacts

LEGALITY STANDARD 3: THE STANDARD FOR PRIVATELY-OWNED FORESTS

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

1. || P1. Timber ownership can be verified || K1.1 Legality of ownership or land title in relation to the timber harvesting area. || 1.1.1 Private land or forest owner can prove ownership or use rights of the land. || Valid land ownership or land tenure documents (land title documents recognized by competent authorities) || Act 5/1960 Regulation of the Minister for Forestry P33/2010 Government Regulation PP12/1998 Regulation of the Minister for Trade 36/2007 Regulation of the Minister for Trade 37/2007 Act 6/1983 Act 13/2003 Act 23/2003 Act 20/2009

Land Cultivation Right. Deed of Establishment of the Company Business licence for companies engaging in trading business (SIUP) Company registration (TDP) Tax payer registration (NPWP)

Map of the area of private forest and boundaries delineated on the ground.

1.1.2 Management units    (either owned    individually or by a    group) demonstrate    valid timber    transportation    documents. || Certificate of Timber Origin or Log Transport Document || Regulation of the Minister for Forestry P30/2012

Invoice/ sales receipt/ freight clearance.

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || || 1.1.3 Management units           show proof of  payment of  applicable  charges related to trees present prior to      the transfer of rights  or tenure of the area. || Proof of payment of Reforestation Fund and/or Forest Resources Fee and compensation to the state for the value of stumpage cut. || Regulation of the Minister for Forestry P18/2007

2. || P2. Compliance  with  environmental     and social  aspects related  to timber  harvesting in the   case of areas  subject to Land  Cultivation  Rights || K2.1 Permit holder has an approved Environmental Impact Assessment (EIA) document and has implemented measures identified in it. || 2.1.1 Permit holder has EIA  documents approved  by the competent  authorities which       cover the entire work  area. || EIA documents || Government Regulation PP27/1999 Regulation of the Minister for Forestry and Plantation 602/1998

3. || P3. Compliance with labor laws and  regulations in the   case of areas  subject to Land  Cultivation  Rights || K3.1 Fulfilment of occupational safety and health (OSH) requirements || 3.1.1 Availability of OSH procedures and their implementation || Implementation of OSH procedures || Regulation of the Minister for Manpower & Transmigration 01/1978 Regulation of the Minister for Forestry P12/2009

OSH equipment

Employment injury records

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || K.3.2   Fulfillment of   workers’ rights || 3.2.1 Freedom of association for workers || Workers belong to workers unions or company policies allow workers to establish or get involved in union activities || Act 21/2000 Regulation of the Minister for Manpower & Transmigration 16/2001

3.2.2  Existence of collective labour agreements || Collective labour agreement documents or company policy documents on labour rights || Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2011

3.2.3 Company does not employ minors underage workers || There are no underage workers || Act 13/2003 Act 23/2003 Act 20/2009

LEGALITY STANDARD 4: THE STANDARD FOR TIMBER UTILISATION
RIGHTS WITHIN NON-FOREST ZONES

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

1. || P1.   Legal status of area and right to utilise || K.1.1. Timber            harvesting            permit within   non-forest zone     without altering the legal status    of the forest. || 1.1.1 Harvesting operation  authorised under  Other Legal Permit      (ILS) / conversion  permits (IPK) in a lease area. || ILS/IPK permits for harvesting operations in the lease area || Regulation of the Minister for Forestry P18/2011

Maps attached to the ILS/IPK permits of the lease area and evidence of compliance on the ground.

K1.2 Timber    harvesting    permit within    non-forest zone    which leads to a    change in the legal status of the forest || 1.2.1 Timber harvesting  authorised under a land conversion  permit (IPK). || Business permit and maps attached to the permit (this requirement applies to both IPK holders and business permit holders) || Regulation of the Minister for Forestry P14/2011 Regulation of the Minister for Forestry P33/2010

IPK in conversion areas

Maps attached to IPK

Documents authorising changes in the legal status of the forest (this requirement applies to both IPK permit holders and business permit holders)

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || K1.3 Permit to extract    timber forest    products from a    state forest area           for    Reforestation- based Plantation    Forest (HTHR)    activities || 1.3.1. Timber harvesting is  authorised under a  permit to extract     timber forest products  from reforestation-  based plantation  forests in areas  designated for  reforestation-based  plantation forests  (HTHR) || HTHR permit || Regulation of the Minister for Forestry P59/2011

Maps attached to HTHR and evidence of compliance on the ground

2. || P2. Compliance with legal systems and procedures for tree harvesting and for the transportation of logs || K2.1 IPK/ILS plan and implementation complies with land use planning. || 2.1.1 Approved work plan for the areas covered    by IPK/ ILS || IPK/ILS work plan documents || Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P53/2009

Valid equipment permit

2.1.2 The permit holder       can demonstrate that   the transported logs          are from areas under   valid land conversion   permit/ other use           permits (IPK/ILS) || Forest inventory documents || Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P55/2006

Timber Production Report documents (LHP)

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || K2.2 Payment of government fees and levies and compliance with timber transportation requirements || 2.2.1 Evidence of payment   of charges. || Proof of payment of Reforestation Funds, Forest Resources Fee and compensation to the state for the value of stumpage cut. || Regulation of the Minister for Forestry P18/2007

2.2.2 Permit holder has           valid timber   transportation   documents || Logs Transportation Invoice (FAKB) and log list for small diameter logs || Regulation of the Minister for Forestry P55/2006

Log Legality Document (SKSKB) and log list for large diameter logs

3. || P3. Compliance with labor laws   and regulations || K.3.1 Fulfillment of  occupational safety and health  (OSH)  requirements || 3.1.1 Availability of OSH procedures and their implementation || Implementation of OSH procedures || Regulation of the Minister for Manpower & Transmigration 01/1978 Regulation of the Minister for Forestry P12/2009

OSH equipment

Employment injury records

K.3.2 Fulfillment of   workers’ rights || 3.2.1 Freedom of association for workers || Workers belong to workers unions or company policies allow workers to establish or get involved in union activities || Act 21/2000 Regulation of the Minister for Manpower & Transmigration 16/2001

No. || Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || || 3.2.2    Existence of collective labour agreements || Collective labour agreement documents or company policy documents on labour rights || Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2011

3.2.3 Company does not         employ minors/ underage workers || There are no underage workers || Act 13/2003 Act 23/2003 Act 20/2009

LEGALITY STANDARD 5:
THE STANDARD FOR PRIMARY AND DOWNSTREAM FOREST-BASED INDUSTRY

Principles || Criteria || Indicators || Verifiers || Related Regulations

P1. Timber forest product processing industry supports the realization of legal trade in timber. || K1.1. Business units in the form of : (a) Processing industry, and (b) Exporters of processed products are in possession of valid permits || 1.1.1 Processing industry units are in possession of valid permits || The deed of establishment of the company and latest amendments to the deed (the Company’s Establishment Deed) || Regulation of the Minister for Law & Human Rights M.01-HT.10/2006 Regulation of the Minister for Trade 36/2007 Regulation of the Minister for Trade 37/2007 Act 6/1983 Government Regulation PP80/2007 Regulation of the Minister for Forestry P35/2008 Regulation of the Minister for Forestry P16/2007 Regulation of the Minister for Trade 39/2011 Regulation of the Minister for Industry 41/2008 Reg. of the Minister for Environment 13/2010

Permit to engage in trading business (Business Licence /SIUP) or trading permit, which may be Industrial Business Permit (IUI) or Permanent Business Permit (IUT) or Industrial Registration Certificate (TDI)

Nuisance/ disturbance permit (permit issued to the company for affecting the environment around which it operates its business)

Company Registration Certificate (TDP)

Tax Payer Identification Number (NPWP)

Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || || Availability of Environmental Impact Assessment documents ||

Availability of Industrial Business Permit (IUI) or Permanent Business Permit (IUT) or Industrial Registration Certificate (TDI)

Availability of Raw Materials Stock Planning (RPBBI) for Forest Products Primary Industry (IPHH).

1.1.2 Exporters of  processed timber  products have valid  permits as both  producers and  exporters of timber  products. || The exporters have the status of Registered Exporters of Forestry Industry Products (ETPIK). || Regulation of the Minister for Trade P64/2012

Principles || Criteria || Indicators || Verifiers || Related Regulations

|| K1.2 Business units          in the form of   groups of   artisans /   household   industries are   legally   registered || 1.2.1 The business groups   (cooperatives /   limited partnership   (CV) / other   business groups) are   legally established. || Deed of establishment || Act 6/1983

Tax Payer Registration (NPWP)

1.2.2 Traders of   processed timber   products have valid   registration as   exporters and are   supplied by small        and medium   certified   processing industry    not registered as   exporters || Registration of the traders as Non-Producer Exporters of Forestry Industry Products (ETPIK Non Produsen). || Regulation of the Minister for Trade P64/2012

|| || || Agreement or contract of collaboration with a processing industry unit which has timber legality certificate (S-LK)

Principles || Criteria || Indicators || Verifiers || Related Regulations

P2. Business units apply  timber tracking  system which  ensures that the  origin of the timber         can be traced || K2.1 Existence and   application of a   system which   traces timber in   the forest   products || 2.1.1 Business units can   demonstrate that the   timber received   comes from legal   sources. || Sales and purchase documents and or contract of supply of materials and or proof of purchase and equipped with forest products legality documents / letter of attestation of the legality of forest products || Regulation of the Minister for Forestry P55/2006 Regulation of the Minister for Forestry P30/2012 Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P56/2009

Approved report on the transfer of timber and/or proof of transfer and or official report on the examination of timber; letter of attestation of the legality of forest products

Imported timber is accompanied by Import Notification documents and information concerning the origin of the timber as well as documents certifying the legality of the timber and country of harvest

Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || || Log transport documents ||

Transport documents (SKAU/ Nota) with corresponding official reports from the officer of the local authority with respect to used timber from demolished buildings/ structures, unearthed timber and buried timber.

Transport documents in the form of FAKO/ Nota for industrial waste wood

Documents/ reports on changes in the stock of round logs (LMKB) /reports on changes in the stock of small-diameter round logs (LMKBK)/reports on changes in the stock of processed timber forest products (LMHHOK)

Supporting documents, that is, Raw Materials Stock Planning (RPBBI), letter of decision officially certifying the annual work plan (SK RKT)

Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || 2.1.2 Business units apply        a timber tracking  system and operate    within permitted  production levels || Tally sheets on the use of raw materials and on production outputs. || Regulation of the Minister for Forestry P55/2006 Regulation of the Minister for Industry 41/2008 Regulation of the Minister for Forestry P35//2008

Output reports on the production of processed products.

The production of the unit does not exceed the permitted production capacity.

Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || 2.1.3 Production process    in collaboration with   another party   (another industry or   with artisans/   household   industries) provides   for tracking of   timber || Contract of collaboration or service contract for product processing with another party || Regulation of the Minister for Trade 37/M-DAG/PER/9/2007 Act 6/1983 Regulation of the Minister for Forestry P35/2008 Regulation of the Minister for Forestry P16/2007 Regulation of the Minister for Trade 39/M-DAG/PER/12/2011 Regulation of the Minister for Industry 41/M- IND/PER/6/2008 Regulation of the Minister for Forestry P55/2006

The collaborating party has valid permits as set out under Principle 1

Segregation/ separation of produced products.

|| || || Documentation of raw materials, processes, production and where applicable of exports if export is conducted through the business unit / another company with which collaboration agreement is entered into.

Principles || Criteria || Indicators || Verifiers || Related Regulations

P3. Legality of the trade          or the change of  ownership of  processed  timber. || K3.1 Inter-island   transportation and trade   complies with   applicable   legislation. || 3.1.1 The business unit   shipping processed   timber products   inter-island are   Registered Inter-   island Timber   Traders (PKAPT). || PKAPT documents || Regulation of the Minister for Industry and Trade 68/MPP/Kep/2/2003 Joint Regulation of the Minister for Forestry, Minister for Transportation, and Minister for Industry and Trade 22/2003

PKAPT report documents

|| || 3.1.2 The vessel used to   transport processed   timber is   Indonesian-flagged     and possesses valid   permits to operate. || Documents showing identity of vessel. Registration documents which show the identity of the vessel and valid permit. || Regulation of the Minister for Forestry P55/2006 Regulation of the Minister for Forestry P30/2012 Regulation of the Minister for Transportation KM71/2005

|| || || The identity of vessel agrees with that stated in the log or timber transport documents

Principles || Criteria || Indicators || Verifiers || Related Regulations

|| || || || Joint Regulation of the Minister for Forestry, Minister for Transportation, and Minister for Industry and Trade 22/2003

|| || 3.1.3 Registered Inter-       island Timber   Traders (PKAPT) can demonstrate   that the   transported   timber originates  from legitimate   sources || Log or timber transport documents || Regulation of the Minister for Forestry P55/2006 Regulation of the Minister for Forestry P30/2012 Joint Regulation of the Minister for Forestry, Minister for Transportation, and Minister for Industry and Trade 22/2003

Timber administration marks/barcode (PUHH) on logs.

Principles || Criteria || Indicators || Verifiers || Related Regulations

|| K3.2 Shipping of   processed   timber for   export   complies with   applicable   legislation. || 3.2.1 Shipping of   processed timber      for export with   Export Notification   (PEB) documents || PEB || Act 17/2006 (Customs) Regulation of the Minister for Finance 223/PMK.011/2008. Regulation of the Directorate General for Customs P-40/BC/2008 Regulation of the Directorate General for Customs P-06/BC/2009 Regulation of the Minister for Trade P64/2012 Presidential Decree 43/1978 Regulation of the Minister for Forestry 447/2003

Packing list

Invoice

B/L (bill of lading)

Export licence documents (V-Legal)

Results of technical verification (Surveyor’s Report) for products for which technical verification is mandatory

|| || || Proof of payment of export duty, where applicable.

Other relevant documents (including CITES permits) for types of wood whose trade is restricted

Principles || Criteria || Indicators || Verifiers || Related Regulations

P4. Fulfilment of labour      regulations as far as      processing industry      is      concerned || K.4.1 Fulfilment of occupational safety and health (OSH) requirements || 4.1.1  Availability of OSH procedures and implementation || Implementation of OSH procedures. || Regulation of the Minister for Manpower & Transmigration 01/1978 Regulation of the Minister for Forestry P12/2009

OSH equipment such as lightweight fire extinguishers, personal protective equipment and evacuation routes

Employment injury records

K.4.2 Fulfilment of the rights of workers || 4.2.1  Freedom of association for workers || Trade union or a company policy that allows employees/ workers to establish a trade union or get involved in trade union activities || Regulation of the Minister for Manpower & Transmigration 16/2001

4.2.2  Existence of collective labour agreement or company policy on labour rights || Availability of collective labour agreement or company policy documents on labour rights || Act 13/2013 Regulation of the Minister for Manpower & Transmigration 16/2011

|| || 4.2.3  Company does not employ minor/ underage workers || There are no underage workers || Act 13/2003 Act 23/2003 Act 20/2009

ANNEX III

CONDITIONS
FOR THE RELEASE FOR FREE CIRCULATION IN THE UNION OF INDONESIAN FLEGT-LICENSED
TIMBER PRODUCTS

1.           Lodging of the licence

1.1.        The licence shall be lodged
with the competent authority of the Union Member State in which the shipment
covered by that licence is presented for release for free circulation. This can
be done electronically or by other expeditious means.

1.2.        A licence shall be accepted
if it meets all the requirements set out in Annex IV and no further
verification in accordance with sections 3, 4 and 5 of this Annex is deemed
necessary.

1.3.        A licence may be lodged
before the arrival of the shipment it covers.

2.           Acceptance
of the licence

2.1.        Any licence which does not
meet the requirements and specifications set out in Annex IV is invalid.

2.2.        Erasures in or alterations
to a licence shall only be accepted if such erasures or alterations have been
validated by the Licensing Authority.

2.3.        A licence shall be
considered as void if it is lodged with the competent authority after the
expiry date indicated in the licence. The extension of the validity of a
licence shall not be accepted unless that extension has been validated by the
Licensing Authority.

2.4.        A duplicate or replacement
licence shall not be accepted unless it has been issued and validated by the
Licensing Authority.

2.5.        Where further information
is required on the licence or on the shipment, in accordance with this Annex,
the licence shall be accepted only after the required information has been
received.

2.6.        Where the volume or weight
of the timber products contained in the shipment presented for release for free
circulation does not deviate by more than ten per cent from the volume or weight
indicated in the corresponding licence, it shall be considered that the
shipment conforms to the information provided in the licence in so far as
volume or weight is concerned.

2.7.        The competent authority
shall, in accordance with the applicable legislation and procedures, inform the
customs authorities as soon as a licence has been accepted.

3.           Verification of the
validity and authenticity of the licence

3.1.        In case of doubt concerning
the validity or authenticity of a licence, a duplicate or a replacement
licence, the competent authority may request additional information from the
Licence Information Unit.

3.2.        The Licence Information
Unit may request the competent authority to send a copy of the licence in
question.

3.3.        If necessary the Licensing
Authority shall withdraw the licence and issue a corrected copy which will be
authenticated by the stamped endorsement 'Duplicate' and forward it to the
competent authority.

3.4.        If no answer is received by
the competent authority within twenty-one calendar days of the request for
additional information from the Licence Information Unit, as specified in
section 3.1 of this Annex, the competent authority shall not accept the licence
and shall act in accordance with applicable legislation and procedures.

3.5.        If the validity of the
licence is confirmed, the Licence Information Unit shall inform the competent
authority forthwith, preferably by electronic means. The copies returned shall
be authenticated by the stamped endorsement 'Validated on'.

3.6.        If following the provision
of additional information and further investigation, it is determined that the
licence is not valid or authentic the competent authority shall not accept the
licence and shall act in accordance with applicable legislation and procedures.

4.           Verification of the
conformity of the licence with the shipment

4.1.        If further verification of
the shipment is considered necessary before the competent authorities can
decide whether a licence can be accepted, checks may be carried out to
establish whether the shipment in question conforms to the information provided
in the licence and/or to the records relating to the relevant licence held by
the Licensing Authority.

4.2.        In case of doubt as to the
conformity of the shipment with the licence the competent authority concerned
may seek further clarification from the Licence Information Unit.

4.3.        The Licence Information
Unit may request the competent authority to send a copy of the licence or the
replacement in question.

4.4.        If necessary, the Licensing
Authority shall withdraw the licence and issue a corrected copy which must be
authenticated by the stamped endorsement 'Duplicate' and forwarded to the
competent authority.

4.5.        If no answer is received by
the competent authority within twenty one calendar days upon request of the
further clarification as specified in section 4.2 above, the competent
authority shall not accept the licence and shall act in accordance with
applicable legislation and procedures.

4.6.        If following the provision
of additional information and further investigation, it has been determined
that the shipment in question does not conform with the licence and/or to the
records relating to the relevant licence held by the Licensing Authority, the
competent authority shall not accept the licence and shall act in accordance
with applicable legislation and procedures.

5.           Other matters

5.1.        Costs incurred while the
verification is being completed shall be at the expense of the importer, except
where the applicable legislation and procedures of the Union Member State
concerned determine otherwise.

5.2.        Where persistent
disagreements or difficulties arise from the verification of licences the
matter may be referred to the JIC.

6.           EU Customs declaration

6.1.        The number of the licence
that covers the timber products that are being declared for release for free
circulation shall be entered in Box 44 of the Single Administrative Document on
which the customs declaration is made.

6.2.        Where the customs
declaration is made by means of a data-processing technique the reference shall
be provided in the appropriate box.

7.           Release for Free
Circulation

7.1.        Shipments of timber
products shall be released for free circulation only when the procedure
described in section 2.7 above has been duly completed.

ANNEX IV

REQUIREMENTS AND TECHNICAL
SPECIFICATIONS OF FLEGT LICENCES

1.           General requirements of
FLEGT licences

1.1.        A FLEGT licence may be in
paper or electronic form.

1.2.        Both paper-based and
electronic licences shall provide the information specified in Appendix 1, in
accordance with the notes for guidance set out in Appendix 2.

1.3.        A FLEGT licence shall be
numbered in a manner that allows the Parties to distinguish between a FLEGT
licence covering shipments destined for Union markets and a V-Legal Document
for shipments destined for non-Union markets.

1.4.        A FLEGT licence shall be
valid from the date on which it is issued.

1.5.        The period of validity of a
FLEGT licence shall not exceed four months. The date of expiry shall be
indicated on the licence.

1.6.        A FLEGT licence shall be
considered void after it has expired. In the event of force majeure or other
valid causes beyond the control of the licensee, the Licensing Authority may
extend the period of validity for an additional two months. The Licensing Authority
shall insert and validate the new expiry date when granting such an extension.

1.7.        A FLEGT licence shall be
considered void and returned to the Licensing Authority if the timber products
covered by that licence have been lost or destroyed prior to its arrival in the
Union.

2.           Technical specifications
with regard to paper-based FLEGT licences

2.1.        Paper-based licences shall
conform to the format set out in Appendix 1.

2.2.        The paper size will be
standard A4. The paper will have watermarks showing a logo that will be
embossed on the paper in addition to the seal.

2.3.        A FLEGT licence shall be
completed in typescript or by computerised means. It may be completed in
manuscript, if necessary.

2.4.        The stamps of the Licensing
Authority shall be applied by means of a stamp. However, an embossment or
perforation may be substituted for the Licensing Authority stamp.

2.5.        The Licensing Authority
shall use a tamper-proof method to record the quantity allocated in such a way
as to make it impossible to insert figures or references.

2.6.        The form shall not contain
any erasures or alterations, unless those erasures or alterations have been
authenticated by the stamp and signature of the Licensing Authority.

2.7.        A FLEGT licence shall be
printed and completed in English.

3.           Copies
of FLEGT Licences

3.1.        A FLEGT licence shall be
drawn up in seven copies, as
follows:

i.    an ‘Original’ for the competent authority
on white paper;

ii.   a ‘Copy for Customs at destination’ on
yellow paper;

iii.   a ‘Copy for the Importer’ on white
paper;

iv.  a ‘Copy for the Licensing Authority’ on
white paper;

v.   a ‘Copy for the Licensee’ on white paper;

vi.  a ‘Copy for the Licence Information Unit’
on white paper;

vii.  a ‘Copy for Indonesian Customs’ on white
paper

3.2.        The copies marked
‘Original’, ‘Copy for Customs at destination’ and ‘Copy for the Importer’ shall
be given to the licensee, who shall send them to the importer. The importer
shall lodge the original with the competent authority and the relevant copy
with the customs authority of the Member State of the Union in which the
shipment covered by that licence is declared for release for free circulation.
The third copy marked ‘Copy for the Importer’ shall be retained by the importer
for the importer’s records.

3.3.        The fourth copy marked
'Copy for the Licensing Authority’ shall be retained by the Licensing Authority
for its records and for possible future verification of licences issued.

3.4.        The fifth copy marked 'Copy
for the Licensee' shall be given to the licensee for the licensee’s
records.

3.5.        The sixth copy marked ‘Copy
for the Licence Information Unit’ shall be given to the Licence Information
Unit for its records.

3.6.        The seventh copy marked
‘Copy for Indonesian Customs’ shall be given to the customs authority of Indonesia
for exportation purposes.

4.           FLEGT licence lost, stolen
or destroyed

4.1.        In the event of loss, theft
or destruction of the copy marked ‘Original’ or the copy marked ‘Copy for
Customs at destination’ or both, the licensee or the licensee’s authorised representative
may apply to the Licensing Authority for a replacement. Together with the
application, the licensee or the licensee’s authorised representative shall
provide an explanation for the loss of the original and/or the copy.

4.2.        If it is satisfied with the
explanation, the Licensing Authority shall issue a replacement licence within
five working days of receipt of the request from the licensee.

4.3.        The replacement shall
contain the information and entries that appeared on the licence it replaces,
including the licence number, and shall bear the endorsement 'Replacement
Licence'.

4.4.        In the event that the lost
or stolen licence is retrieved, it shall not be used and must be returned to
the Licensing Authority.

5.           Technical specifications
with regard to electronic FLEGT licences

5.1.        The FLEGT licence may be
issued and processed using electronic systems.

5.2.        In Member States of the
Union which are not linked to an electronic system a paper-based licence shall
be made available.

APPENDICES

1.           Licence Format

2.           Notes for Guidance.

Appendix 1: Licence Format

Appendix 2 Notes for Guidance

General:

–
Complete in capitals.

–
ISO codes, where indicated, refer to the
international standard two letter code for any country.

–
Box 2 is for use by the Indonesian authorities
only

–
Headings A and B for use of FLEGT licensing to
the EU only

Heading A || Destination || Insert 'European Union' if the licence covers a shipment destined for the European Union.

Heading B || FLEGT licence || Insert 'FLEGT' if the licence covers a shipment destined for the European Union.

|| ||

Box 1 || Issuing authority || Indicate the name, address, and registration number of the Licensing Authority.

Box 2 || Information for use by Indonesia || Indicate the name and address of the importer, the total value (in USD) of the shipment, as well as the name and the two-letter ISO code of the country of destination and where applicable of the country of transit.

Box 3 || V-Legal/licence number || Indicate the issuing number.

Box 4 || Date of expiry || Period of validity of the licence.

Box 5 || Country of export || This refers to the partner country from where the timber products were exported to the EU.

Box 6 || ISO code || Indicate the two-letter ISO code for the partner country referred to in Box 5.

Box 7 || Means of transport || Indicate the means of transport at the point of export.

Box 8 || Licensee || Indicate the name and address of the exporter, including the registered exporter ETPIK and tax payer numbers.

Box 9 || Commercial Description || Indicate the commercial description of the timber product(s). The description should be sufficiently detailed to allow for classification into the HS.

Box 10 || HS code || For the ‘Original’, ‘Copy for Customs at Destination’ and ‘Copy for Importer’ indicate the four-digit or six-digit commodity code established pursuant to the Harmonised Commodity Description and Coding System. For copies for use within Indonesia (copies (iv) to (vii) as set out in Article 3.1 of Annex IV) indicate the ten-digit commodity code in accordance with the Indonesia Customs Tariff Book.

Box 11 || Common and scientific names || Indicate the common and scientific names of the species of timber used in the product. Where more than one species is included in a composite product, use a separate line. May be omitted for a composite product or component that contains multiple species whose identity has been lost (e.g. particle board).

Box 12 || Countries of harvest || Indicate the countries where the species of timber referred to in Box 10 was harvested. Where a composite product include for all sources of wood used. May be omitted for a composite product or component that contains multiple species whose identity has been lost (e.g. particle board).

Box 13 || ISO codes || Indicate the ISO code of the countries referred to in box 12. May be omitted for a composite product or component that contains multiple species whose identity has been lost (e.g. particle board).

Box 14 || Volume (m3) || Indicate the overall volume in m3. May be omitted unless the information referred to in box 15 has been omitted.

Box 15 || Net weight (kg) || Indicate the overall weight of the shipment at the time of measurement in kg. This is defined as the net mass of the timber products without immediate containers or any packaging, other than bearers, spacers, stickers etc.

Box 16 || Number of units || Indicate the number of units, where a manufactured product is best quantified in this way. May be omitted.

Box 17 || Distinguishing marks || Insert barcode and any distinguishing marks where appropriate e.g. lot number, bill of lading number. May be omitted.

Box 18 || Signature and stamp of issuing authority || The box shall be signed by the authorised official and stamped with the official stamp of the Licensing Authority. The signatories' name, as well as place and date shall also be indicated.

ANNEX V

INDONESIAN TIMBER LEGALITY
ASSURANCE SYSTEM

1.           Introduction

Objective: To provide assurance that
harvesting, transportation, processing and selling of round logs and processed
timber products comply with all relevant Indonesian laws and regulations.

Known for its pioneering role in combating
illegal logging and the trade in illegally harvested timber and timber
products, Indonesia hosted the East Asia Ministerial Conference on Forest Law
Enforcement and Governance (FLEG) in Bali, in September 2001, which resulted in
the Declaration on Forest Law Enforcement and Governance’ (Bali Declaration).
Since then, Indonesia has continued to be at the forefront of international
cooperation in combating illegal logging and associated trade.

As part of international efforts to address
these issues, a growing number of consumer countries have committed themselves
to take measures to prevent trade in illegal timber on their markets, whilst
producer countries have committed themselves to provide a mechanism assuring
the legality of their timber products. It is important to establish a credible
system to guarantee the legality of harvesting, transportation, processing and
trade of timber processed timber products.

The Indonesian Timber Legality Assurance System (TLAS) provides assurance that timber and timber products produced
and processed in Indonesia come from legal sources
and are in full compliance with relevant Indonesian laws and regulations, as verified by independent auditing and monitored by civil
society.

1.1.        Indonesian laws and
regulations as foundation of the TLAS

The Indonesian regulation on the ‘Standards and
Guidelines on the Assessment of Performance of Sustainable Forest Management
and the Verification of Timber Legality in the State and Privately-owned
Forests’ (Forestry Minister’s Regulation P.38/Menhut-II/2009) establish the
TLAS as well as the sustainability scheme (SFM), to improve forest governance;
to suppress illegal logging and the associated timber trade and to ensure the
credibility and improve the image of Indonesia’s timber products.

The TLAS comprises the following elements:

1.      Legality Standards,

2.      Control of Supply Chain,

3.      Verification Procedures,

4.      Licensing Scheme,

5.      Monitoring.

TLAS is the basic system used to assure the
legality of timber and timber products produced in Indonesia for export to the
Union and to other markets.

1.2.        Development of the TLAS: a
multi-stakeholder process

Since 2003, a wide range of Indonesian forestry
stakeholders have been actively engaged in developing, implementing and
evaluating the TLAS, thereby providing better oversight, transparency and
credibility in the process. In 2009, the multi-stakeholder process resulted in
the issuance of Forestry Minister’s Regulation P.38/Menhut-II/2009, followed by
DG Forest Utilization Technical Guidelines No.6/VI-SET/2009 and
No.02/VI-BPPHH/2010.

2.           Scope of the TLAS

Indonesian forest resources can broadly be
divided into two types of ownership: state forests and privately owned
forests/lands. State forests consist of production forests for long-term
sustainable timber production under a variety of permit types and forest areas
that can be converted for non-forestry purposes such as for settlement or
plantations. The application of TLAS on state forests and privately owned forests/lands
is set out in Annex II.

The TLAS covers timber and timber products from
all permit types as well as the operations of all timber traders, downstream
processors and exporters.

The TLAS requires that imported timber and
timber products are cleared at customs and comply with Indonesia’s import
regulations. Imported timber and timber products must be accompanied by
documents providing assurance of the legality of the timber in its country of
harvest. Imported timber and timber products will have to enter into a
controlled supply chain that complies with the Indonesian rules and
regulations. Indonesia will provide guidance on how to implement the above.

Certain timber products may contain recycled
materials. Indonesia provides guidance on how the use of recycled materials
will be dealt with under the TLAS.

Impounded timber is not
included in the TLAS and therefore cannot be
covered by a FLEGT licence.

The TLAS covers timber products destined for
domestic and international markets. All Indonesian producers, processors, and
traders (operators) will be verified for legality, including those supplying
the domestic market.

2.1.        TLAS
legality standards

The TLAS has five timber legality standards.
These standards and their verification guidelines are set out in Annex II.

The TLAS also incorporates the ‘Standard and
Guidelines on Assessment of Performance in Sustainable Forest Management
(SFM)’. The assessment of sustainable forest management using the SFM standard
also verifies that the auditee complies with the relevant legality criteria.
SFM-certified organisations operating within production forest zones on
state-owned lands (permanent forest domain) adhere to both relevant legality
and SFM standards.

3.           Control of the Timber
Supply Chain

The permit holder (in the case of concessions)
or landowner (in the case of private land) or company (in the case of traders,
processors and exporters) shall demonstrate that every node of their supply
chain is controlled and documented as set out in the Minister for Forestry
Regulations P.55/Menhut-II/2006 and P.30/Menhut-II/2012 (hereinafter referred
to as the Regulations). These Regulations require provincial and district
forestry officials to undertake field verification and validate the documents
which are submitted by permit holders, landowners, or processors at each node
of the supply chain.

The operational controls at each point in the
supply chain are summarised in Diagram 1; the guidance for imports is
being developed.

All consignments in the supply chain must be
accompanied by relevant transport documents. Companies must apply appropriate
systems to segregate between timber and timber products from verified sources
with timber and timber products from other sources, and maintain records that
distinguish between these two sources. Companies at each point in the supply
chain are required to record whether the involved logs, products or timber
consignment are TLAS-verified.

Operators in the supply chain are required to
keep records on received, stored, processed and delivered timber and timber
products so as to enable subsequent reconciliation of quantitative data between
and within nodes of the supply chain. Such data shall be made available for
provincial and district forestry officials to carry out reconciliation tests.
Main activities and procedures, including reconciliation, for each stage of the
supply chain are further explained in the Appendix of this Annex.

Diagram 1: Control of the supply chain
which shows the required key documents at each point in the supply chain.

4.           Institutional
set-up for Legality Verification and Export Licensing

4.1.        Introduction

The Indonesian TLAS is based on an approach
known as 'operator-based licensing' which has much in common with product or
forest management certification systems. The Indonesian Ministry of Forestry
nominates a number of conformity assessment bodies (LP and LV) which it
authorizes to audit the legality of operations of timber producers, traders,
processors and exporters ('operators').

The conformity assessment bodies (CAB) are
accredited by the Indonesian National Accreditation Body (KAN). CAB are
contracted by operators who want their operations to be certified as legal and
are required to operate according to relevant ISO guidelines. They report the
outcome of the audits to the auditee and to the Ministry of Forestry.

The CAB ensure that the auditees operate in
compliance with the Indonesian legality definition as contained in Annex II,
including controls to prevent material from unknown sources entering their
supply chains. When an auditee is found to be compliant, a legality certificate
with a validity of 3 (three) years is issued.

LVs also act as export licensing authorities
and check verified exporters' supply chain control systems. If compliant, they
issue export licences in the form of V-Legal Documents. Thus exports without an
export permit are prohibited.

Indonesia has enacted a regulation which allows
civil society groups to raise objections on the legality verification of an
operator by CAB or in the event of illegal activities detected during
operations. In case of complaints about the operations of a conformity
assessment body, civil society groups can file complaints with KAN.

The relationship between different entities
involved in implementing the TLAS is illustrated in Diagram 2:

4.2.        Conformity
assessment bodies

The conformity assessment bodies play a key
role in the Indonesian system. They are contracted to verify the legality of
the production, processing and trade activities of individual companies in the
supply chain, including the integrity of the supply chain. LV also issue
V-Legal Documents for individual shipments of exported timber.

There are two types of CAB: (i) assessment
bodies (Lembaga Penilai/LP) which audits the performance of Forest Management
Units (FMUs) against the sustainability standard; and (ii) verification bodies
(Lembaga Verifikasi/LV), which audit FMUs and forest-based industries against
the legality standards.

In order to ensure those audits that verify the
legality standards as set out in Annex II are of the highest quality, the LP
and LV are required to develop the necessary management systems addressing
competency, consistency, impartiality, transparency, and assessment process
requirements as outlined in ISO/IEC 17021 (SFM Standard for LPs) and/or ISO/IEC
Guide 65 (Legality Standards for LVs). These requirements are specified in the
TLAS Guidelines.

LVs can also act as Licensing Authorities. In
this case the LVs issue export licences to cover timber products destined to
international markets. For non-Union markets, the Licensing Authorities will
issue V-Legal Documents, and as for the Union market, FLEGT licenses will be
issued in accordance with the requirements as outlined in Annex IV. Indonesia
is developing detailed procedures for the V-Legal Document or FLEGT licensing
of export consignments.

The LVs are contracted by the auditees to carry
out legality audits and will issue TLAS legality certificates and V-Legal
document or FLEGT licences for exports to international markets. LPs will audit
timber producing concessions against the SFM standard. LPs do not issues export
licences.

4.3.        Accreditation body

The Indonesian National Accreditation Body
(Komite Akreditasi Nasional - KAN) is responsible for the accreditation of CAB.
In case of problem with a LP or LV, complaints can be submitted to the KAN.

On 14 July 2009, the KAN signed a Memorandum of
Understanding with the Ministry of Forestry to provide accreditation services
for the TLAS. KAN is an independent accreditation body established through
Government Regulation (Peraturan Pemerintah/PP) 102/2000 concerning National
Standardisation and Presidential Decree (Keputusan Presiden/Keppres) 78/2001
regarding the National Accreditation Committee.

The KAN operates under the guidance of ISO/IEC
17011 (General Requirements for Accreditation Bodies Accrediting Conformity
Assessment Bodies). It has developed internal TLAS-specific supporting
documents for the accreditation of LPs (DPLS 13) and LVs (DPLS 14). In addition,
the KAN will develop requirements and guidance for the accreditation of LVs for
export licensing.

KAN is internationally recognised by the
Pacific Accreditation Cooperation (PAC) and the International Accreditation
Forum (IAF) to accredit certification bodies for Quality Management Systems,
Environmental Management Systems and Product Certification. KAN is also
recognised by the Asia Pacific Laboratory Accreditation Cooperation (APLAC) and
the International Laboratory Accreditation Cooperation (ILAC).

4.4.        Auditees

Auditees are operators which are subject to
legality verification. They include forest management units (concessionaires or
timber utilization permit holders, community-based forest permit holders,
private forest/land owners) and forestry-based industries. The forest
management units and forest-based industries must comply with the applicable
TLAS standard. For export purposes, the forest-based industries must comply
with export licensing requirements. The system allows auditees to submit appeals
to the LP or LV on the conduct of or results of audits.

4.5.        Independent monitor

Civil society plays a key role in the
Independent Monitoring (IM) of the TLAS. Findings from the Independent Monitor
can also be used as part of the Periodic Evaluation (PE) which is required
under this Agreement.

In the event of an assessment-related
irregularity, complaints by civil society shall be submitted directly to the
concerned LP or LV. If no appropriate response is given to the complaints,
civil society entities may file a report to the KAN. For accreditation-related
irregularities, complaints shall be submitted directly to the KAN. Whenever
civil society entities discover wrongdoings by operators, they can lodge
complaints with the relevant LP or LV.

4.6.        The Government

The Ministry of Forestry regulates the TLAS and
authorises the accredited LPs to undertake SFM assessment and LVs to undertake
legality verification and to issue V-Legal Documents.

Furthermore, the Ministry of Forestry also
regulates the Licence Information Unit (LIU) as a unit responsible for
information exchange which receives and stores relevant data and information on
the issuance of V-Legal Documents and which responds to queries from competent
authorities or stakeholders.

5.           Legality Verification

5.1.        Introduction

Indonesian timber is deemed legal when its
origin and production process as well as subsequent processing, transport and
trade activities are verified as meeting all applicable Indonesian laws and
regulations, as set out in Annex II. LVs carry out conformity assessments to
verify compliance.

5.2.        Legality verification
process

In accordance with ISO/IEC Guide 65 and the
TLAS Guidelines, the legality verification process consists of the following:

Application and contracting: The permit holder submits to the LV an application that defines
the scope of verification, permit holder’s profile and other necessary
information. A contract between the permit holder and the LV, setting out the
conditions for verification, is required prior to the commencement of the
verification activities.

Verification plan: After the signing of the verification contract, the LV prepares a
verification plan, which includes nomination of the audit team, verification
programme and schedule of activities. The plan is communicated to the auditee
and the dates of verification activities agreed upon. This information shall be
made available in advance for the independent monitors through the websites of
LVs and the Ministry of Forestry or mass media.

Verification activities: The verification audit consists of three stages: (i) opening audit
meeting, (ii) document verification & field observation and (iii) closing
audit meeting.

·
Opening audit meeting: the audit’s objective, scope, schedule and methodology are discussed
with the auditee, so as to allow the auditee to raise questions on methods and
conduct of verification activities;

·
Document verification and field observation
stage: in order to collect evidence on the
auditee’s compliance with the Indonesian TLAS requirements, LV checks the
auditee’s systems and procedures, relevant documents and records. LV carries
out field checks to verify compliance, including cross-checking the findings of
official inspection reports. LV also checks the auditee’s timber traceability
system to ensure that, with adequate evidence, all timber meets the legality
requirements.

·
Closing audit meeting: the verification results, in particular any non-compliances that
may be detected, are presented to the auditee. The auditee may raise questions
on the verification results and provide clarification on the evidence presented
by the LV.

Reporting and decision making: The audit team draws up a verification report, following a
structure provided by the Ministry of Forestry. The report is shared with the
auditee within fourteen calendar days after the closing audit meeting. A copy
of the report, which includes a description of any findings of non-compliances,
is submitted to the Ministry of Forestry.

The report is used primarily to decide on the
outcome of the verification audit by the LV. The LV takes the decision on
whether to issue a legality certificate based on the verification report
prepared by the audit team.

In cases of non-compliance, the LV will refrain
from issuing a legality certificate, which will prevent the timber from
entering the supply chain of verified legal timber. Once the non-compliance has
been addressed, the operator may resubmit a request for legality verification.

Infringements, which are discovered by LV
during the verification and reported to the Ministry of Forestry, shall be
handled by the responsible authorities in accordance with administrative or
judicial procedures. If an operator is suspected of breaching regulations, the
national, provincial and district authorities may decide to halt the operator’s
activities.

Issuance of the legality certificate and
recertification: the LV will issue a legality
certificate if an auditee is found to comply with all the indicators in the
legality standard, including the rules on control of the timber supply chain.

The LV may report at any time to the Ministry
of Forestry on issued, changed, suspended and withdrawn certificates and every
three months shall issue a report. The Ministry of Forestry will then publish
these reports on its website.

A legality certificate is valid for a period of
three years, after which the operator is subject to a re-certification audit.
The re-certification shall be done prior to the expiry date of the certificate.

Surveillance:
Operators with a legality certificate are subject to annual surveillance that
follow the principles of the verification activities summarised above. The LV
may also carry out surveillance earlier than scheduled before the annual audit
if the scope of the verification has been extended.

The surveillance team draws up a surveillance
report. A copy of the report, including a description of any non-compliance
found, is submitted to the Ministry of Forestry. Non-compliances detected by
the surveillance will result in to suspension or withdrawal of the legality
certificate.

Infringements discovered by the LV during the
surveillance and reported to the Ministry of Forestry shall be handled by the
relevant authorities, in accordance with administrative or judicial procedures.

Special audits:
Operators with a legality certificate are obliged to report to the LV any
significant changes in ownership, structures, management, and operations that
affect the quality of its legality controls during the period of validity of
the certificate. The LV may carry out special audits to investigate any
complaints or disputes filed by the independent monitors, government
institutions or other stakeholders or upon receipt of the operator’s report on
changes that affect the quality of its legality controls

5.3.        Government responsibility
for enforcement

The Ministry of Forestry, as well as provincial
and district forestry offices are responsible for the control of timber supply
chains and checking of related documents (e.g. annual work plans, log felling
reports, log balance-sheet reports, transport documents, logs/raw
material/processed products balance-sheet reports and production tally sheets).
In the event of inconsistencies, forestry officials may withhold approval of
the control documents resulting in a suspension of operations.

Infringements detected by forestry officials or
by independent monitors are communicated to the LV, which upon verification may
lead the LV to suspend or withdraw the awarded legality certificate. Forestry
officials may take appropriate follow-up action in accordance with the
regulatory procedures.

The Ministry of Forestry also receives copies
of the verification reports and subsequent surveillance and special audit
reports issued by the LVs. Infringements discovered by the LVs, by forestry
officials or by independent monitors are handled in accordance with
administrative and judicial procedures. If an operator is suspected of
breaching regulations, the national, provincial and district authorities may
decide to suspend or halt the operator’s activities.

6.           FLEGT Licensing

The Indonesian FLEGT licence is known as the
“V-Legal Document”. This is an export licence that provides evidence that the
timber products exported meet the Indonesian legality standard as set out in
Annex II and were sourced from a supply chain with adequate controls against
the inflow of timber from unknown sources. The V-Legal Document is issued by
the LVs who act as Licensing Authorities and will be used as a FLEGT licence
for shipments to the Union once the parties have agreed to start the FLEGT
licensing scheme.

Indonesia will clearly define the procedures
for issuing V-Legal Documents and communicate these procedures to the exporters
and any other parties concerned through its licensing authorities (the LVs) and
the website of the Ministry of Forestry.

The Ministry of Forestry has established a
Licence Information Unit to maintain a database with copies of all V-Legal
Documents and LV non-compliance reports. In the event of an inquiry concerning
the authenticity, completeness, and validity of the V-Legal Document or FLEGT
licence, the competent authorities in the Union will contact the Licence
Information Unit in the Ministry of Forestry for further clarification. This
unit will communicate with the relevant LV. The Licence Information Unit will
respond to the competent authorities upon receipt of the information from the
LV.

The V-Legal Document is issued at the point at
which the export consignment is established prior to the transportation to the
point of export. The procedure is as follows:

6.1.        The V-Legal Document is
issued by the LV, which holds a contract with the exporter, for the consignment
of timber products to be exported.

6.2.        The exporter’s internal
traceability system shall provide evidence on the legality of timber for export
licensing. This system shall at minimum cover all the supply chain related
controls from the stage where the raw materials (such as logs or semi-processed
products) were dispatched to the processing mill, within the mill site itself
and from the mill to the point of export.

6.2.1.     With regard to the primary
industry, the exporter’s traceability system shall at minimum cover
transportation from the log landing or log yard and all the subsequent stages
until the point of export.

6.2.2.     With regard to the secondary
industry, the traceability system shall at minimum cover transportation from
the primary industry and all subsequent stages until the point of export.

6.2.3.     If managed by the exporter,
any previous stage of the supply chain as referred to in 6.2.1 and 6.2.2 shall
also be included in the exporter’s internal traceability system.

6.2.4.     If managed by a legal entity
than the exporter, the LV shall verify that the previous stages of the supply
chain as referred to in 6.2.1 and 6.2.2 are controlled by the exporter’s
supplier(s) or sub-supplier(s), and that the transport documents state whether
the timber originates or does not originate from a felling site that has not
been certified for legality.

6.2.5.     For a V-Legal Document to be
issued, all suppliers in the exporter’s supply chain that make up the
consignment must have been covered by a valid legality or SFM certificate and
must demonstrate that at all stages in the supply chain the supply of legally
verified timber has been kept segregated from supplies not covered by a valid
legality or SFM certificate.

6.3.        To obtain a V-Legal
Document, a company must be a registered exporter (an ETPIK holder) who
possesses a valid legality certificate. The ETPIK holder submits a letter of
application to the LV and attaches the following documents to demonstrate that
the timber raw materials in the product originate only from verified legal
sources:

6.3.1.     A summary of the transport
documents for all timber/raw materials received by the factory since the last
audit (up to max twelve months); and

6.3.2.     Summaries of Timber/Raw
Material Balance-Sheet Reports and Processed Timber Balance-Sheet Reports since
the last audit (up to max twelve months);

6.4.        The LV then carries out the
following verification steps:

6.4.1.     Data reconciliation based on
the summaries of the transport documents, Timber/Raw Material Balance-Sheet
Report, and Processed Timber Balance-Sheet Report;

6.4.2.     Control of the recovery
rate(s) for each type of product, based on analysis of the Timber/Raw Material
Balance-Sheet Report and Processed Timber Balance-Sheet Report;

6.4.3.     Where necessary, a field
visit may be conducted after data reconciliation so as to ensure consistency
with the information to be specified in the V-Legal Document. This may be done
through export consignments sample checking and inspecting the factory
operation and record-keeping.

6.5.        Result of verification:

6.5.1.     If an ETPIK holder complies
with legality and supply chain requirements, then the LV issues a V-Legal
Document in the format presented in Annex IV;

6.5.2.     An ETPIK holder meeting the
above mentioned requirements is allowed to use conformity marking on the
products and/or packaging. Guidelines on the use of conformity marking have
been developed.

6.5.3.     If an ETPIK holder does not
comply with the legality and supply chain requirements, LV will issue a
non-compliance report instead of V-Legal Document.

6.6.        The LV shall:

6.6.1.     Forward a copy of a V-Legal
Document or non-compliance report to the Ministry of Forestry within twenty
four hours from the time the decision was taken;

6.6.2.     Submit a comprehensive
report and a public summary report outlining the number of V-Legal Documents
issued as well as the number and type of non-compliances detected to the
Ministry of Forestry once every three months with copies to KAN, Ministry of
Trade, and Ministry of Industry;

7.           Monitoring

The Indonesian TLAS includes civil society
monitoring (Independent Monitoring) and Comprehensive Evaluation (CE). To make
the system even more robust for a FLEGT-VPA, a Period Evaluation (PE) component
is added.

IM is carried out by civil society to assess
compliance of the operators, LPs, and LVs with the Indonesian TLAS requirements
including accreditation standards and guidelines. Civil society is defined in
this context as Indonesian legal entities including forestry NGOs, communities
living in and around the forest, and individual Indonesian citizens.

CE is carried out by multi-stakeholder team
which review the Indonesian TLAS and identify gaps and possible system
improvements as mandated by the Ministry of Forestry.

The objective of PE is to provide independent
assurance that the Indonesian TLAS is functioning as described, thereby
enhancing the credibility of the FLEGT licences issued. PE makes use of the
findings and recommendations of IM and CE. Terms of Reference for PE are set
out in Annex VI.

Appendix
– Control of the Supply Chain

1.           Description of the
operational control of the supply chain for timber from state-owned forests

1.1.        Felling Site

(a)
Main activities:

–
Timber cruising (enumeration of trees) by the
permit holder;

–
Preparation of a Timber Cruising Report by the
permit holder;

–
Verification and approval of the Timber Cruising
Report by the district forestry official;

–
Submission of a Proposed Annual Work Plan by the
permit holder;

–
Approval of the Annual Work Plan by the
provincial forestry official;

–
Harvesting operations by the permit holder,
including skidding of logs to the log-landing site.

(b)
Procedures:

–
Timber cruising (enumeration of trees) is
conducted by the permit holder using tags. These tags are made up of three
detachable sections, attached to the stump, harvested log, and the operator
report. Each section contains the necessary information required for timber
tracking, including the number of the tree and its location ;

–
The permit holder prepares a Timber Cruising
Report, which contains information on the number, estimated volume, preliminary
species identification and location of trees to be harvested, and a summary,
using official Ministry of Forestry
Forms;

–
The permit holder submits the Timber Cruising
Report to the district forestry official. The official conducts both a
document-based and field verification of the Timber Cruising Report on a sample
basis. The official approves
the Report if all is in order;

–
The Timber Cruising Report provides the basis
for the Proposed Annual Work Plan, which is prepared by the permit holder and
submitted to the provincial forestry officer for review and approval. The
official reviews and cross-checks the Proposed Annual Work Plan against the
approved Timber Cruising Report and approves the work plan
if all is in order;

–
Once the Annual Work Plan is approved by the
official, the permit holder is allowed to commence harvesting operations;

–
During harvesting operations, tags are
used to ensure that the log is from an approved felling site, as described
above.

1.2.        Log-Landing Site

(a)
Main activities:

–
Where necessary, cross cutting of the logs by
the permit holder, and marking of such logs so as to ensure consistency with
the Log Production Report;

–
Scaling (measurement) and grading of logs by the
permit holder;

–
Preparation of a log-list by the permit holder;

–
Submission of Proposed Log Production Report by
the permit holder;

–
Approval of the Log Production Report by the
district forestry official.

(b)
Procedures:

–
The permit holder marks all cross-cut logs;

–
The permanent physical marking of logs consists
of the original tree ID number and other marks enabling the log to be linked to
the approved felling site;

–
The permit holder scales and grades all logs and
records the information on the logs in a log-list using an official Ministry of
Forestry Form;

–
Based on the log-list, the permit holder
prepares a periodic Log Production Report and a summary report
using official
Ministry of Forestry Forms;

–
The permit holder periodically submits the Log
Production Report and summary to the district forestry official for approval;

–
The district forestry official carries out
sample-based physical verification of the reports. The result of the
physical verification is summarised in a log-verification-list using an official Ministry of Forestry Form;

–
Subject to a positive outcome of the physical
verification the official approves the Log Production Report;

–
Once logs have been verified by the official
they must be stacked separately from any non-verified logs;

–
The Log Production Report is used to calculate
the required payment of the Forest Resources Fee and to the Reforestation Fund (as applicable).

(c)
Data reconciliation:

For natural forest concessions:

The district forestry official checks the
number of logs, the tags and the total cumulative volume of logs extracted and
declared in the Log Production Report against the quota approved in the Annual
Work Plan.

For timber plantation concession:

The district forestry official checks the total cumulative volume of logs extracted and
declared in the Log Production Report against the approved quota in the Annual
Work Plan.

1.3.        Log-Yard

Logs are transported from the log-landing site to log yards and then either
directly transported to a processing mill or to an intermediate log-yard.

(a)
Main activities:

–
Preparation of a log-list by the permit holder;

–
Invoicing by the district forest office and
payment of relevant amount for the Forest Resources Fee and to the Reforestation
Fund by the permit holder. Based
on the log-list, the district forestry official conducts a field inspection;

–
Subject to a positive result of the field
inspection, issuance by the official of a Log Transport Document, to which is annexed a log-list;

–
Preparation of a Log Balance-Sheet Report by
the permit holder.

(b)
Procedures:

–
The permit holder submits a request to settle
the relevant fees to the district
forestry official in charge of billing, based on the log–list, which is
attached to the request;

–
Based on the aforementioned request, the
district forestry official issues an invoice or invoices for settlement
by the permit holder;

–
The permit holder pays the amount set out in the Forest Resources Fee and/or Reforestation Fund Invoice(s) and the district forestry official issues a
receipt or receipts for this payment;

–
The permit holder submits a request for the
issuance of Log Transportation Documents, accompanied by the payment receipt,
log-list, and Log Balance-Sheet Report;

–
The district forestry official carries out
administrative and physical verification of the logs to be transported and
prepares a verification report;

–
Subject to a positive outcome of the
verification, the district forestry official issues the Log Transport
Documents;

–
The permit holder prepares/updates the Log
Balance-Sheet Report to record the quantity of incoming, stored and outgoing
logs at the logyard.

(c)
Data reconciliation:

The district forestry official checks the Log
Balance-Sheet Report comparing
inflows, outflows and storage of logs at the log yard, based on Log Production Reports and relevant Log Transport
Documents.

1.4.        Intermediate Log-Yard

Intermediate log-yards are used if logs are not transported from the concession area
directly to the mill yard. Intermediate log-yards are used in particular for inter-island transportation of logs
or if the transport mode is changed.

The permit for establishment of an intermediate
log-yard is granted by the
forestry official based on a proposal submitted by the permit holder. An
intermediate log-yard permit is
valid for five years, but can be extended following review and approval by the
forestry official.

(a)
Main activities:

–
Termination of the validity
of the Log Transport Document by an official;

–
Preparation of Log Balance-Sheet Report by the permit holder;

–
Preparation of log-list by the permit holder;

–
The permit holder completes
the Log Transport Document following
the format provided by the Ministry of Forestry.

(b)
Procedures

–
The district forestry official physically
verifies the number, species, and dimensions of incoming logs by counting them
(census) or on a sample basis if the number of logs exceeds 100;

–
Subject to a positive outcome of the
verification, the official terminates the validity of the Log Transport
Document for the incoming logs;

–
The permit holder prepares a Log Balance-Sheet
Report as a means to control the inflow and outflow of logs at the intermediate
log-yard;

–
For the outgoing logs, the permit holder
prepares a log-list, which is linked to the previous Log Transport Documents;

–
The Log Transport Document for moving logs from
the intermediate log yard is completed by the permit holder.

(c)
Data reconciliation:

The district forestry official checks the
consistency between the logs transported from the log-yard and the logs
entering the intermediate log-yard.

The permit holder updates the Log Balance-Sheet
Report, which records inflows, outflows and storage of logs at the intermediate
log-yard, based on the relevant Log Transport Documents.

2.           Description of the
operational control of supply chains of timber from for privately owned
forest/lands

Timber harvesting
operations on privately-owned forest/land are regulated by Minister of Forestry Regulation P.30/Menhut-II/2012 (hereinafter referred to as the Regulation).

There are no legal requirements for the private
owners of forest/lands to affix ID marks on trees inventoried for harvesting or
on logs. Log yards and intermediate log yards are generally not used for timber
harvested from privately-owned forest/lands.

Control procedures for timber from
privately-owned forest/lands differ between logs obtained from trees which were
on the site when the land title was acquired and logs obtained from trees that
have been planted since the title
was acquired. They also depend on the tree species harvested. The
payment of the Forest Resources Fee and to the Reforestation Fund applies to
logs from trees already present on the site when the land title was awarded but
does not apply to logs from trees established after the award of the land
title.

In the case of logs harvested from trees established after granting of the land
title, there are
two scenarios:

–
for species listed in
Article 5(1) of the Regulation, the owner prepares an invoice, which
serves as the transport document.

–
for other
species, the head of the village or
appointed official issues the transport document.

In the case of logs harvested from trees
present on a site before the granting of the land title, the district forestry official issues the transport document.

Felling/Log-Landing Site

(a)
Main activities:

–
Recognition of the property right;

–
Where necessary, cross-cutting

–
Scaling (measurement);

–
Preparation of a log-list;

–
Invoicing by the district forestry office and payment of the
invoiced amount by the owner of the Forest Resources
Fee and/or to the Reforestation
Fund;

–
Issuance or preparation of the transport
document.

(b)
Procedures:

–
The private forest/land owner requests
recognition of his or her property right;

–
Once the forest/land property right is
recognised, the owner prepares a log-list after measurement of the logs;

In the case of logs harvested from trees
present on a site before the granting of the land title:

–
The owner submits a log-list and a request to
settle the Forest Resources Fee and Reforestation Fund payment to the district
forestry official

–
The official conducts document checks and
physical verification of the logs (dimensions, species identification, and
number of logs);

–
Subject to a positive outcome of the document
checks and physical verification, the district forestry official issues a
Forest Resources Fee and Reforestation Fund Invoice for settlement by the
owner;

–
The landowner submits the receipt for payment of
the Forest Resources Fee and to the Reforestation Fund to the head of village,
together with a request for issuance of a Log Transport Document;

–
The head of village conducts document checks and
physical verification of the logs (dimensions, species identification, and
number of logs);

–
Based on the above, the head of village issues
the Log Transport Document.

In the case of logs harvested from trees established after granting of the land
title:

Species listed in Article 5(1) of the
Regulation:

–
The owner marks the logs and identifies the species;

–
The owner prepares a log-list;

–
Based on the above, the owner prepares an invoice following the format provided by the
Ministry of Forestry, which also serves as the transport document.

Other species not listed in Article 5(1) of the Regulation:

–
The owner marks the logs and identifies the species;

–
The owner prepares a log-list;

–
The owner submits the log-list and a request for
issuance of a Log Transport Document to the head of village or appointed official;

–
The head of village or
appointed official conducts document checks and
physical verification of the logs (species identification, number of logs, location of harvest);

–
Based on the above, the head of village or appointed official issues the Log Transport
Document following the format provided by the Ministry of Forestry.

(c)
Data reconciliation:

The head of village or appointed official or
the district forestry official compares the volume of harvested logs with the
log-list.

3.           Description of the
operational control of timber supply chains for industry and for export.

3.1.        Primary/Integrated Industry

(a)
Main activities:

–
Preparation of Log Balance-Sheet Report by the processing mill;

–
Physical verification of logs by the district
forestry official;

–
Termination of the validity
of Log Transport Document by an official;

–
Preparation of Raw Material and Products Tally
Sheet by the mill;

–
Preparation of Processed Timber Balance-Sheet
Report by the mill;

–
The mill completes in the Timber
Products Transport Document following the format provided by the Ministry of Forestry;

–
Preparation of sales report of the mill.

(b)
Procedures:

–
The mill prepares a Log Balance-Sheet Report as a means to record the flow
of logs in to and within the mill;

–
The mill submits copies of the Log Transport Documents corresponding to each
batch of logs received by the mill to the district forestry official;

–
The official verifies the
information in the reports by comparing with the physical products. This may be
done on the basis of a sample if there are over 100 items;

–
Subject to a positive outcome of the verification, the official terminates the
validity of the Log Transport Documents;

–
The official files copies of the Log Transport
Documents and prepares a Summary List of the Log Transport Documents, following the format provided by the Ministry
of Forestry;

–
Copies of the Log Transport Documents whos validity that have been terminated by an official are handed over to the company for
filing;

–
A summary of the Log Transport Documents is
submitted to the district forestry office at the end of each month;

–
The mill prepares raw material and product tally sheets by production line
as a means to control the input of logs and output of timber products and to
calculate the recovery rate;

–
The mill prepares a Processed Timber Balance-Sheet Report as a means to
report on flows of timber product within and from the mill, as well as stocks;

–
The company or mill sends sales reports of the mill to the district forestry office on a regular basis.

(c)
Data reconciliation:

The company checks the Log Balance-Sheet Report
comparing inflows, outflows and storage of logs based on Log Transport
Documents.

The Production Tally Sheet is used to reconcile
input and output volume of production lines and the recovery rate is compared with the
published average rate.

The company checks the Processed Products
Balance-Sheet Report comparing inflows, outflows and storage of products based
on Timber Product Transport Documents.

The district forestry official checks the
reconciliation carried out by the company.

3.2.        Secondary Industry

(a)
Main activities:

–
Preparation of Processed
Timber (semi-processed products) and Processed Products
Balance-Sheet Reports by the factory;

–
Preparation of invoices by the factory,
which also serve as transport documents for processed timber
products;

–
Preparation of Processed Timber Balance-Sheet Report by the factory;

–
Preparation of Sales Report by the company or factory.

(b)
Procedures:

–
The factory files the Processed Timber Transport
Documents (for incoming material) and prepares a summary of these documents,
which is submitted to the district forestry official;

–
The factory uses the Processed Timber and
Processed Products Tally Sheet by production lines as a means to report on
flows of materials into the factory, output of products and to calculate the
raw material recovery rate;

–
The factory prepares a Processed Timber
Balance-Sheet Report as a means to check flows of materials into the mill,
output of timber products and stocks held The company or factory prepares
invoices for processed products, which else serves as the transport document,
and files copies of the invoices. A timber products list is annexed to each
invoice;

–
The company or factory sends Sales Reports to
the district forestry office.

(c)
Data reconciliation:

The factory checks the Processed Timber Balance-Sheet Report
comparing inflows, outflows and storage of materials based on Processed Timber Transport Documents and Processed Timber Tally
Sheet.

The Production Tally Sheet is used to check input and output volume of production
lines and the recovery rate is evaluated.

The company checks the Processed Products
Balance-Sheet Report, comparing
inflows, outflows and storage of products based on invoices.

The above is subject to checks under the Forest
Utilization Director-General Regulation P.8/VI-BPPHH/2011.

4.           Export

The procedures and reconciliation processes for
export of timber originating from state-owned forests and privately-owned
forest/land are identical.

(a)
Main activities:

–
The Ministry of Trade issues a Forestry Industry
Products Registered Exporters Certificate (ETPIK) to the exporter;

–
The Exporter requests the issuance of a V-Legal
Document/FLEGT licence for each
export consignment;

–
The LV verifies the
relevant conditions have been met and issues the
V-Legal Document/FLEGT licence;

–
The exporter prepares an Export Declaration
Document, which is submitted to
Customs;

–
The Customs issues an
Export Approval Document for Customs
clearance.

(b)
Procedures:

–
The exporter requests the LV to issue a V-Legal
Document/FLEGT licence;

–
The LV issues a V-Legal Document/FLEGT licence after a document-based
and physical verification, so as to ensure that the timber or timber products
come from legally verified sources and are thus produced in compliance with the
legality definition described in Annex II;

–
The exporter submits an Export Declaration
Document to which are attached the invoice, Packing List, Export Duty Receipt/Bukti
Setor Bea Keluar (if regulated), ETPIK Certificate, V-Legal Document/FLEGT licence, Export Permit/Surat
Persetujuan Ekspor (if regulated), Surveyor Report (if regulated), and
CITES Document (where applicable) to the Customs for approval;

–
Subject to a positive outcome of the
verification of the Export
Declaration Document, Customs issues an Export Approval Document/Nota Pelayanan Ekspor.

ANNEX VI

TERMS OF REFERENCE FOR PERIODIC
EVALUATION

1.           Objective

Periodic Evaluation (PE) is an independent
evaluation done by an independent third party, referred to as Evaluator. The
objective of PE is to provide assurance that the TLAS is functioning as
described, thereby enhancing the credibility of the FLEGT licences issued under
this Agreement.

2.           Scope

PE shall cover:

1.           The functioning of control
measures from the point of production in the forest to the point of export of
timber products.

2.           The data management and
timber traceability systems supporting the TLAS, the issuance of FLEGT licences
as well as the production, licensing and trade statistics relevant to this
Agreement.

3.           Output

The output of PE comprises regular reports
presenting evaluation findings and recommendations on measures to be undertaken
to address gaps and system weaknesses identified by the evaluation.

4.           Main activities

PE activities include inter alia:

(a)
Audits of compliance by all bodies undertaking
control functions within the provisions of the TLAS;

(b)
Evaluation of the effectiveness of supply chain
controls from the point of production in the forest to the point of export from
Indonesia;

(c)
Assessment of the adequacy of data management
and timber traceability systems supporting the TLAS as well as the issuance of
FLEGT licences;

(d)
Identification and recording of cases of
non-compliance and system failures, and prescribing necessary corrective
actions;

(e)
Assessment of the effective implementation of
corrective actions previously identified and recommended; and

(f)
Reporting findings to the Joint Implementation
Committee (JIC).

5.           Evaluation Methodology

5.1.        The Evaluator shall use a
documented and evidence-based methodology which meets the requirements of
ISO/IEC 19011, or equivalent. This shall include adequate checks of relevant
documentation, operating procedures and records of the operations of the
organisations responsible for implementing the TLAS, identification of any
cases of non-compliance and system failures, and issuance of requests for
corresponding corrective action.

5.2.        The Evaluator shall, inter
alia:

(a)
Review the process for accreditation of
Independent Assessment and Verification Bodies (LP and LV);

(b)
Review documented procedures of each body
involved in TLAS implementation controls for completeness and coherence;

(c)
Examine implementation of documented procedures
and records, including work practices, during visits to offices, forest
harvesting areas, log yards/log ponds, forest checking stations, mill sites and
export and import points;

(d)
Examine information collected by the regulatory
and enforcement authorities, LPs and LVs and other bodies identified in the
TLAS to verify compliance;

(e)
Examine data collection by private sector
organisations involved in TLAS implementation;

(f)
Assess the availability of public information
set out in Annex IX including the effectiveness of information disclosure
mechanisms;

(g)
Make use of the findings and recommendations of
Independent Monitoring and Comprehensive Evaluation reports, as well as reports
of the Independent Market Monitor;

(h)
Seek the views of stakeholders and use
information received from stakeholders who are either directly or indirectly
involved in the implementation of the TLAS; and

(i)
Use appropriate sampling and spot check methods
to evaluate the work of the forest regulatory agencies, LPs and LVs,
industries, and other relevant actors at all levels of forest activities,
supply chain control, timber processing and export licensing, including cross
checks with information on timber imports from Indonesia provided by the Union.

6.           Qualifications of the
Evaluator

The Evaluator shall be a competent, independent
and impartial third party that complies with the following requirements:

(a)
The Evaluator shall demonstrate the
qualifications and capability to meet the requirements of ISO/IEC Guide 65 and
ISO/IEC 17021, or equivalent, including the qualification to offer assessment
services covering the forest sector and forest products supply chains;

(b)
The Evaluator shall not be directly involved in
forest management, timber processing, trade in timber or control of the forest
sector in Indonesia or in the Union;

(c)
The Evaluator shall be independent from all
other components of the TLAS and Indonesia’s forest regulatory authorities and
shall have systems to avoid any conflict of interest. The Evaluator shall
declare any potential conflict of interest that may arise and take effective
action to mitigate it;

(d)
The Evaluator and its employees undertaking the
evaluation tasks shall have proven experience of auditing tropical forest
management, timber processing industries and related supply chain controls;

(e)
The Evaluator shall have a mechanism in place
for receiving and dealing with complaints that arise from its activities and
findings.

7.           Reporting

7.1.        The PE report shall
comprise: (i) a full report containing all relevant information on the
evaluation, its findings (including cases of non-compliance and system
failures) and recommendations; and (ii) a public summary report based on the
full report, covering key findings and recommendations;

7.2.        The full report and the
public summary report shall be submitted to the JIC for review and approval
before releasing the reports to the public;

7.3.        Upon the request of the JIC
the Evaluator shall provide additional information to support or clarify its
findings;

7.4.        The Evaluator shall notify
the JIC of all received complaints and the actions taken to resolve them.

8.           Confidentiality

The Evaluator shall maintain the
confidentiality of data it receives while carrying out its activities.

9.           Appointment, periodicity
and financing

9.1.        The Evaluator shall be
appointed by Indonesia after consultation with the Union in the JIC;

9.2.        PE shall be carried out at
intervals of no more than twelve months starting from the date as agreed by the
JIC in accordance with Article 14 (5) (e) of the Agreement.

9.3.        The financing of the PE
shall be decided by the JIC.

ANNEX VII

TERMS OF REFERENCE FOR INDEPENDENT
MARKET MONITORING

1.           Objective of Independent
Market Monitoring

Independent Market Monitoring (IMM) is market
monitoring done by an independent third party referred to as Monitor. The
objective of Independent Market Monitoring (IMM) is to collect and analyse
information on the acceptance of Indonesian FLEGT-licensed timber in the Union
market, and review impacts of Regulation (EU) No 995/2010 of the European
Parliament and of the Council of 20 October 2010 laying down the obligation of
operators who place timber and timber products on the market and of related
initiatives such as public and private procurement policies.

2.           Scope

IMM shall cover:

2.1.        The release for free circulation
of Indonesian FLEGT-licensed timber at points of entry in the Union;

2.2.        The performance of
Indonesian FLEGT-licensed timber in the Union market and the impact of
market-related measures taken in the Union on the demand for Indonesian
FLEGT-licensed timber;

2.3.        The performance of
non-FLEGT-licensed timber in the Union market and the impact of market-related
measures taken in the Union on the demand for non-FLEGT-licensed timber;

2.4.        Examination of the impact
of other market-related measures taken in the Union such as public procurement
policies, green building codes and private sector action such as trade codes of
practice and corporate social responsibility.

3.           Output

The output of IMM will comprise regular
reports to the Joint Implementation Committee (JIC) containing its findings and
recommendations on measures to strengthen the position of Indonesian
FLEGT-licensed timber in the Union market and to improve the implementation of
market-related measures to prevent illegally harvested timber from being placed
on the Union market.

4.           Main Activities

IMM includes inter alia:

4.1.        Evaluation of:

(a)
progress with and impact of the implementation
of policy measures to tackle trade in illegally harvested timber in the Union.

(b)
trends in imports of timber and timber products
by the Union from Indonesia as well as other VPA and non-VPA timber exporting
countries;

(c)
actions by pressure groups that could affect
demand for timber and timber products or markets for Indonesia’s forest
products trade.

4.2.        Reporting findings and
recommendations to the JIC.

5.           Monitoring Methodology

5.1.        The Monitor shall have a
documented and evidence-based methodology. This shall include adequate analysis
of relevant documentation, identification of any inconsistencies in the
available trade data and information, and in-depth interviews with relevant
actors on key indicators of the impacts and effectiveness of market-related
measures.

5.2.        The Monitor shall conduct
observations and analysis on, inter alia:

(a)
The current market situation and trends in the
Union for timber and timber products;

(b)
Public procurement policies and their treatment
of FLEGT- and non-FLEGT- licensed timber and timber products in the Union;

(c)
Legislation affecting the timber industry, the
trade in timber and timber products within the Union and imports of timber and
timber products into the Union;

(d)
Price differentials between FLEGT- and
non–FLEGT- licensed timber and timber products in the Union;

(e)
Market acceptance, perception and market share
of FLEGT-licensed and certified timber and timber products in the Union;

(f)
Statistics and trends on volumes and values of
imports at different Union ports of FLEGT- and non-FLEGT-licensed timber and
timber products from Indonesia as well as other VPA and non-VPA timber
exporting countries;

(g)
Descriptions of, including any changes to, the
legal instruments and processes by which competent authorities and border
control authorities in the Union validate FLEGT licences and release shipments
for free circulation, as well as penalties imposed for non-compliance;

(h)
Possible difficulties and constraints faced by
exporters and importers in bringing FLEGT-licensed timber into the Union;

(i)
The effectiveness of campaigns to promote FLEGT-licensed
timber in the Union;

5.3.        The Monitor shall recommend
market promotion activities to further enhance the market acceptance of
Indonesian FLEGT-licensed timber

6.           Qualifications of the
Independent Market Monitor

The Monitor shall:

(a)
be an independent third party with a proven
track record of professionalism and integrity in monitoring the Union timber
and timber products market and related trade issues;

(b)
be familiar with the trade in and markets for
Indonesian timber and timber products, in particular, hardwood and for those
countries in the Union producing similar products;

(c)
have systems to avoid any conflict of interest.
The Monitor shall declare any potential conflict of interest that may arise and
take effective action to mitigate it.

7.           Reporting

7.1.        Reports shall be submitted
biennially and comprise: (i) a full report containing all relevant findings and
recommendations; and (ii) a summary report based on the full report.

7.2.        The full report and the
summary report shall be submitted to the JIC for review and approval before
releasing the reports to the public;

7.3.        Upon the request of the JIC
the Monitor shall provide additional information to support or clarify its
findings.

8.           Confidentiality

The Monitor shall maintain the
confidentiality of data it receives while carrying out its activities.

9.           Appointment, periodicity
and financing

9.1.        The Monitor shall be
appointed by the Union after consultation with Indonesia in the JIC;

9.2.        IMM shall be carried out at
intervals of no more than twenty four months starting from the date as agreed
by the JIC in accordance with Article 14(5) (e) of the Agreement

9.3.        The financing of IMM shall
be decided by the JIC

ANNEX VIII:

CRITERIA FOR ASSESSING THE
OPERATIONALITY OF THE INDONESIAN TIMBER LEGALITY ASSURANCE SYSTEM

Background

An independent technical evaluation of the
Indonesian TLAS will be carried out before FLEGT licensing of timber exports to
the Union starts. This technical
evaluation will aim at: (i) examining the function of the TLAS in practice to
determine whether it delivers the intended results and (ii) examining any
revisions made to the TLAS after this Agreement was signed;

The criteria for this evaluation are set
out below:

1.           Definition of legality

2.           Control of the supply
chain

3.           Verification procedures

4.           Licensing of exports

5.           Independent monitoring

1.           Definition of Legality

Legally produced timber should be
defined on the basis of the laws applicable in Indonesia. The definition used
must be unambiguous, objectively verifiable and operationally workable and, as
a minimum, include those law and regulations which cover:

·
Harvesting rights: Granting of legal rights
to harvest the timber within legally designated and/or gazetted boundaries;

·
Forest operations: Compliance with legal
requirements regarding forest management including compliance with relevant
environmental and labour law and regulations;

·
Fees and taxes: Compliance with legal
requirements concerning taxes, royalties and fees directly related to timber
harvesting rights and to timber harvesting;

·
Other users: Respect for other parties’ legal
tenure or rights of use of land and resources that may be affected by timber
harvesting rights, where such other rights exist;

·
Trade and customs: Compliance with legal
requirements for trade and customs procedures.

Key Questions:

·
Have the definition of legality and the legality
verification standards been amended since this Agreement was concluded?

·
Have the relevant labour laws and regulations
been included in the legality definitions as per Annex II?

In the event of amendments to the legality
definition, key questions will include:

·
Were all relevant stakeholders consulted about
these amendments and any subsequent changes to the
legality verification system through a process that
took adequate account of their viewpoints?

·
Is it clear what legal instrument underpins each
new element of the definition? Are criteria and indicators that can be used to
test compliance with each element of the definition specified? Are the criteria
and indicators clear, objective and operationally workable?

·
Do the criteria and indicators clearly identify
the roles and responsibilities of all relevant parties and does verification
assess their performance?

·
Does the definition of legality include the main
areas of existing law and regulations outlined above? If not, why were certain
areas of law and regulations left out from the definition?

2.           Control of the Supply
Chain

Systems to control the supply chain must
provide credible assurance that timber products can be traced throughout the
supply chain from harvesting or point of import to the point of export. It will
not always be necessary to maintain physical traceability for a log, log load
or timber product from the point of export back to the forest of origin, but it
is always needed between the forest and the first point of mixing (e.g. a
timber terminal or a processing facility).

2.1.        Rights of use

There is clear delineation of areas
where forest resource use rights have been allocated and the holders of those
rights have been identified.

Key Questions:

·
Does the control system ensure that only timber
originating from a forest area with valid use rights enters the supply chain?

·
Does the control system ensure that enterprises
carrying out harvesting operations have been granted appropriate rights of use
for the concerned forest areas ?

·
Are the procedures for issuing rights of
harvesting and the information on such rights, including their holders,
available in the public domain?

2.2.        Methods for controlling the
supply chain

There are effective mechanisms for
tracing timber throughout the supply chain from harvesting to the point of
export. The approach for identifying timber may vary, ranging from the use of
labels for individual items to reliance on documentation accompanying a load or
a batch. The selected method should reflect the type and value of timber and
the risk of contamination with unknown or illegal timber.

Key Questions:

·
Are all supply chain alternatives, including
different sources of timber, identified and described in the control system?

·
Are all stages in the supply chain identified
and described in the control system?

·
Have methods to identify the product origin and
to prevent mixing with timber from unknown sources in the following stages of
the supply chain been defined and documented?

·
standing timber

·
logs in the forest

·
transport and interim storage (log yards/ponds,
interim log yards/ponds)

·
arrival at processing facility and storage of
materials

·
entry into and exit from production lines at
processing facility

·
storing of processed products at the processing
facility

·
exit from processing facility and transport

·
arrival at point of export

·
Which organisations are in charge of controlling
the timber flows? Do they have adequate human and other resources for carrying
out the control activities?

·
In the event of concrete findings that
unverified timber enters into the supply chain, have any
weaknesses in the control system being identified e.g. the
absence of an inventory of standing timber before harvesting from private forest/lands?

·
Does Indonesia have a policy on the inclusion of
recycled materials in the Indonesian TLAS and if so, has guidance on how to
include recycled materials been developed?

2.3.        Quantitative data
management:

There are robust and effective
mechanisms for measuring and recording the quantities of timber or timber
products at each stage of the supply chain, including reliable and accurate
pre-harvest estimations of the standing timber volume in each harvesting site.

Key questions:

·
Does the control system produce quantitative
data of inputs and outputs, including conversion ratios where applicable, at
the following stages of the supply chain:

·
standing timber

·
logs in the forest (at log landings)

·
transported and stored timber (log yards/ponds,
interim log yards/ponds)

·
arrival at the processing facility and storing
of materials

·
entry into and exit from production lines

·
storing of processed products at the processing
facility

·
exit from processing facility and transport

·
arrival at point of export

·
Which organisations are responsible for keeping
records on the quantitative data? Are they adequately resourced in terms of
personnel and equipment?

·
What is the quality of the controlled data?

·
Are all quantitative data recorded in a way that
makes it possible to verify quantities with the prior and subsequent stages in
the supply chain in a timely manner?

·
What information on the supply chain control is
made publicly available? How can interested parties access this information?

2.4.        Segregation of legally verified
timber from timber of unknown sources

Key Questions:

·
Are there sufficient controls in place to
exclude timber from unknown sources or timber which was harvested without legal
harvesting rights?

·
What control measures are applied to ensure that
verified and unverified materials are segregated throughout the supply chain?

2.5.        Imported timber products

There are adequate controls to ensure
that imported timber and derived products have been legally imported.

Key Questions:

·
How is the legal import of timber and derived
products demonstrated?

·
What documents are required to identify the
country of harvest and to provide assurance that imported products originate
from legally harvested timber, as referred to in Annex V?

·
Does the TLAS identify imported timber and
timber products throughout the supply chain until they are mixed for
manufacturing of processed products?

·
Where imported timber is used, can the country
of harvest origin be identified on the FLEGT licence (may be omitted for
reconstituted products)?

3.           Verification Procedures

Verification provides adequate checks to
ensure the legality of timber. It must be sufficiently robust and effective to
ensure that any non-compliance with requirements, either in the forest or
within the supply chain, is identified and prompt action is taken.

3.1.        Organisation

Verification is carried out by a third-party organisation
which has adequate resources, management systems, skilled
and trained personnel, as well as robust and effective mechanisms to control
conflicts of interest.

Key Questions:

·
Do the verification bodies have a valid
accreditation certificate issued by the National Accreditation Body (KAN)?

·
Does the government appoint bodies to undertake
the verification tasks? Is the mandate (and associated responsibilities) clear
and in the public domain?

·
Are institutional roles and responsibilities
clearly defined and applied?

·
Do the verification bodies have adequate
resources for carrying out verification against the legality definition and the
systems for controlling the timber supply chain?

·
Do the verification bodies have a fully
documented management system that:

·
ensures its personnel have
the necessary competence and experience to carry out effective verification?

·
applies internal control / supervision?

·
includes mechanisms to control conflicts of
interest?

·
ensures transparency of the system?

·
defines and applies verification methodology?

3.2.        Verification with respect
to the definition of legality

There is a clear definition that sets
out what has to be verified. The verification methodology is documented and
ensures that the process is systematic, transparent, evidence-based, carried out at regular
intervals and covers everything included within the definition.

Key Questions:

·
Does the verification methodology used by the
verification bodies cover all elements of the legality definition and
include tests of compliance with all indicators?

·
Do the verification bodies:

·
check documentation, operating records and
on-site operations (including through spot checks)?

·
collect information from external interested
parties?

·
record their verification activities?

·
Are the verification results made publicly
available? How can interested parties access this information?

3.3.        Verification of systems for
controlling the integrity of the supply chain

There is a clear scope of criteria and
indicators to be verified which covers the entire supply chain. The
verification methodology is documented, ensures that the process is systematic,
transparent, evidence-based, carried out at regular intervals, covers all
criteria and indicators within the scope and includes regular and timely
reconciliation of data between each stage in the chain.

Key Questions:

·
Does the verification methodology fully cover
checks on supply chain controls? Is this clearly spelt out in the verification
methodology?

·
What evidence is there to demonstrate
application of verification of supply chain controls?

·
Which organisations are responsible for data
verification? Do they have adequate human and other resources for carrying out
the data management activities?

·
Are there methods for assessing correspondence
between standing timber, harvested logs and timber entering the processing
facility or point of export?

·
Are there methods to assess the coherence
between inputs of raw materials and the outputs of processed products at
sawmills and other plants? Do these methods include specification and periodic
updating of conversion ratios?

·
What information systems and technologies are
applied for storing, verifying, and recording data? Are there robust systems in
place for securing the data?

·
Are the verification results on supply chain
control made publicly available? How can the interested parties access this
information?

3.4.        Mechanisms for handling
complaints

There are adequate mechanisms for
handling complaints and disputes that arise from the verification process.

Key Questions:

·
Do verification bodies have a complaints
mechanism that is available to all interested parties?

·
Do the verification bodies have mechanisms in
place to receive and respond to objections from the independent monitors?

·
Do the verification bodies have mechanisms in
place to receive and respond to infringements / breaches detected by government
officials?

·
Is it clear how complaints are received,
documented, escalated (where necessary) and responded to?

3.5.        Mechanisms for dealing with
non-compliance

There are adequate mechanisms for
dealing with cases of non-compliance identified during the verification process
or brought forward through complaints and independent monitoring.

Key Questions:

·
Is there an effective and functioning mechanism
for requiring and enforcing appropriate corrective decision on verification
results and action where breaches are identified?

·
Does the verification system define the above
requirement?

·
Have mechanisms been developed for handling
cases of non-compliance? Are these applied in practice?

·
Are there adequate records available on cases of
non-compliance and of correction of the verification results, or on other actions
taken? Is there an evaluation
of the effectiveness of such actions?

·
Is there a mechanism for reporting to the
government on verification findings of the verification bodies?

·
What kind of information on cases of
non-compliance goes into the public domain?

4.           Licensing of Exports

Indonesia has assigned overall
responsibility for issuing V-Legal Document/FLEGT licences to licensing authorities. FLEGT
licences are issued for individual shipments destined to the Union.

4.1.        Organisational set-up

Key Questions:

·
Which bodies are assigned responsibility for
issuing FLEGT licences?

·
Does the Licensing Authority have a valid
accreditation certificate issued by KAN?

·
Are the roles of the Licensing Authority and its
personnel with regard to the issuance of FLEGT licences clearly defined and
publicly available?

·
Are the competence requirements defined and
internal controls established for the personnel of the Licensing Authority?

·
Does the Licensing Authority have adequate
resources for carrying out its task?

4.2.        Issuing of V-Legal Documents
and their use for FLEGT licensing

Adequate arrangements have been made to
use V-Legal Documents for
FLEGT licensing.

Key Questions:

·
Does the Licensing Authority have publicly
available documented procedures for issuing a V-Legal Document?

·
What evidence is there that these procedures are
properly applied in practice?

·
Are there adequate records on issued V-Legal Documents and on cases where V-Legal Documents were not issued? Do the records
clearly show the evidence on which the issuing of V-Legal Documents is based?

·
Does the Licensing Authority have adequate
procedures to ensure that each shipment of timber meets the requirements of the
legality definition and supply chain controls?

·
Have the requirements for issuing licences been
clearly defined and communicated to exporters and to other concerned parties?

·
What kind of information on issued licences goes
into the public domain?

·
Do the FLEGT licences comply with the technical specifications contained in Annex IV?

·
Has Indonesia developed a numbering system for
FLEGT licences that enables differentiation between FLEGT licences destined to
the Union market and V-Legal Documents
destined to non-Union markets?

4.3.        Queries on issued FLEGT
licences

There is an adequate mechanism in place
for handling queries from competent authorities with regard to FLEGT licences,
as set out in Annex III.

Key Questions:

·
Has a Licence Information Unit been assigned and
established, inter alia, to receive and respond to inquiries from the
competent authorities?

·
Have clear communication procedures been
established between the Licence Information Unit and the competent authorities?

·
Have clear communication procedures been
established between the Licence Information Unit and the Licensing Authority?

·
Are there channels for Indonesian or international stakeholders to inquire about issued FLEGT
licences?

4.4.        Mechanism for handling
complaints

There is an adequate mechanism for handling complaints and
disputes that arise from licensing. This mechanism makes it possible to deal
with any complaint relating to the operation of the licensing scheme.

Key Questions:

·
Is there a documented procedure for handling
complaints that is available to all interested parties?

·
Is it clear how complaints are received,
documented, escalated (where necessary) and responded to?

5.           Independent Monitoring

Independent Monitoring (IM) is conducted
by Indonesia’s civil society and is independent from other elements of the TLAS
(those involved in the management or regulation of forest resources and those
involved in the independent audit). One of the key objectives is to maintain
the credibility of the TLAS by monitoring the implementation of verification.

Indonesia has formally recognized the IM
function and allows civil society to submit complaints when irregularities in
the accreditation, assessment and licensing processes are found.

Key Questions:

·
Has the government made the guidelines for IM
publicly available?

·
Do the guidelines provide clear requirements on
the eligibility of organisations to perform IM functions to ensure impartiality
and avoid conflicts of interest?

·
Do the guidelines provide procedures to access
the information contained in Annex IX?

·
Can civil society access the information
contained in Annex IX in practice?

·
Do the guidelines provide procedures for the
submission of complaints? Are these procedures publicly available?

·
Have reporting and public disclosure provisions
that apply to verification bodies been clarified and established?

ANNEX IX

PUBLIC DISCLOSURE OF INFORMATION

1.           1. Introduction

The Parties are committed to ensuring that
key forestry-related information is made available to the public.

This Annex provides for this objective to
be met by outlining (i) the forestry-related information to be made available
to the public, (ii) the bodies responsible for making that information
available, and (iii) the mechanisms by which it can be accessed.

The aim is to ensure that (1) JIC
operations during implementation of this Agreement are transparent and
understood; (2) a mechanism exists for the Parties as well as relevant
stakeholders to access key forestry-related information; (3) TLAS functioning
is strengthened through the availability of information for independent
monitoring; and (4) larger objectives of this Agreement are achieved. The public
availability of information represents an important contribution to reinforcing
Indonesia’s forest governance.

2.           Mechanisms to access
information

This Annex is in line with the Indonesian
Law on Freedom of Information No. 14/2008. According to this Law, it is
mandatory for every public institution to develop regulations on access to
information by the public. The Law distinguishes four categories of
information: (1) information available and actively disseminated on a regular
basis; (2) information that should be made public without delay; (3)
information that is available at all times and provided upon request; and (4)
information that is restricted or confidential.

The Ministry of Forestry (Ministry of
Forestry), provincial and district offices, the National Accreditation Body
(KAN), the conformity assessment body (CAB), the licensing authorities are all
significant institutions in the functioning of the TLAS and therefore obliged
as part of their duties to disclose forestry-related information to the public.

To implement the said Law, the Ministry of
Forestry, provincial and district offices and all other public agencies
including KAN have developed or are developing procedures for making
information available to the public.

The KAN is also required to make
information available to the public under ISO/IEC 17011:2004, clause
8.2-Obligation of the accreditation body. Verification bodies and licensing
authorities are required to make information available to the public under Minister for Forestry Regulations and ISO/IEC
17021:2006 clause 8.1-Publicly accessible information and ISO/IEC Guide 65:1996
clause 4.8-Documentation.

Civil society organisations function as one
of the sources of forestry-related information under Minister
for Forestry Regulations.

The Minister for
Forestry has issued Regulation No. P.7/Menhut-II/2011
dated 2 February 2011, which provides that requests for information held by the
Ministry of Forestry are to be addressed to the Director of the Centre for
Public Relations of the Ministry of Forestry in a “one-door” information
policy. Further implementing guidance is being developed by Ministry of
Forestry. Information available at regional, provincial, and district forestry
offices can be accessed directly.

To make this Annex operable, the
procedures/guidelines/instructions for the mentioned institutions to respond to
requests for information need to be developed and approved. In addition, the
reporting and public disclosure provisions that apply to verification bodies
and Licensing Authorities will be clarified.

3.           Categories of information
used to reinforce monitoring and evaluation of the functioning of the TLAS

Laws and regulations: All laws, regulations, standards, and guidelines listed in the
legality standards.

Land and forest allocation: land allocation maps and provincial spatial plans, procedures for
land allocation, forest concession or utilisation rights
and other rights of exploitation and processing, and related document such as concession maps,
forest area release permit, land title documents and land title maps.

Forest management practices: forest use plans, annual work plans including maps and equipment
permit, minutes of consultation meetings with communities living in and around
permit area required for the development of the annual work plans, forest
timber exploitation work plan and annexes, Environmental Impact Assessment
documents and minutes of public consultation meetings required for the
development of the Environmental Impact Assessment reports, log production
reports, and stand inventory data in state-owned forest land.

Transport and supply chain information, e.g. log or forest product transport documents and annexes and
timber reconciliation reports, inter-island timber transportation registration documents, and documents showing
ship identity.

Processing and industry information: e.g. company establishment deed, business licence and company
registration number, report of the Environmental Impact Assessment, industrial
business licence or industrial registration numbers, industrial raw material
supply plans for primary forest product industries, registration of the
exporter of forest industry products, raw material and processed product
reports, list of holders of rights to processing, and information on companies
in secondary processing.

Forest-related fees: e.g. area-based
payment fees and payment slip
invoices, payment orders and invoices for reforestation and forestry
resource fees.

Verification and licensing information: quality guidance and standard of procedures for accreditation; name
and address of each accredited CAB dates of granting accreditation and expiry
dates; scopes of accreditation; list of CAB
personnel (auditors, decision makers) associated with each certificate;
clarification on what is considered commercially confidential information;
audit plan to know when public consultations take place; announcement of audit
by CAB; minutes from public consultations with CAB including list of
participants; public summary of audit result; recap reports by auditing body of
certificate issuance; status report on all audits: certificates passed, failed,
those currently in process, granted, suspended and withdrawn certificates and
any changes to the above; cases of non-compliance relevant to audits and licensing
and the action taken to deal with them; issued export licences; regular recap
reports from licensing authorities.

Monitoring and complaint procedures: standard operating procedures for complaints to KAN, verification
bodies and licensing authorities, including procedures to monitor the progress
of complaint reports and close out of complaint report.

A list of key documents of relevance to
forest monitoring, the agencies that hold these documents as well as the
procedure by which this information can be acquired is contained in the
appendix to this Annex.

4.           Categories of Information
Used to Reinforce Larger VPA Objectives

1.      Record of Discussions in the JIC

2.      The annual report of the JIC
outlining:

(a)
quantities of timber products exported from Indonesia
to the Union under the FLEGT licensing scheme, according to the relevant HS
Heading, and the Union Member State in which importation into the Union took
place;

(b)
the number of FLEGT licences issued by
Indonesia;

(c)
progress in achieving the objectives of this
Agreement and matters relating to its implementation;

(d)
actions to prevent illegally-produced timber
products being exported, imported, and placed or traded on the domestic market;

(e)
quantities of timber and timber products
imported into Indonesia and actions taken to prevent imports of
illegally-produced timber products and maintain the integrity of the FLEGT
Licensing Scheme;

(f)
cases of non-compliance with the FLEGT Licensing
Scheme and the action taken to deal with them;

(g)
quantities of timber products imported into the
Union under the FLEGT licensing scheme, according to the relevant HS Heading
and Union Member State in which importation into the Union took place;

(h)
the number of FLEGT licences from Indonesia
received by the Union;

(i)
the number of cases and quantities of timber
products involved where consultations between the competent authorities and the
Indonesian Licence Information Unit were undertaken.

3.      Full report and summary report of the PE.

4.      Full report and summary report of the IMM.

5.      Complaints about the PE and the IMM
and how they have been handled.

6.      Time schedule for implementation of
this Agreement and overview of activities undertaken.

7.      Any other data and information of
relevance to the implementation and functioning of this Agreement. This
includes:

Legal information

·
The text of this Agreement, its Annexes and any amendments

·
The text of all laws and regulations referred to
in Annex II

·
Implementing regulations and procedures

Information on production:

·
Total annual timber production in Indonesia;

·
Annual volumes of timber products exported
(total and to the Union);

Information on allocation of concessions:

·
Total area of forestry concessions allocated;

·
List of concessions, the names of the companies
to whom they have been allocated and the names of the companies by whom they
are managed;

·
Location map of all logging concessions;

·
List of registered forestry companies
(production, processing, trade and exports);

·
List of SVLK-certified forestry companies (production, processing, trade and
exports);

Information on management

·
List of concessions under management by type;

·
List of certified forestry concessions and the
type of certificate under which they are managed;

Information on authorities:

·
List of Licensing Authorities in Indonesia
including address and contact details;

·
Address and contact details of the Licence
Information Unit;

·
List of competent authorities in the Union
including address and contact details;

This information will be made available
through the websites of the Parties.

1.           Implementation of public
disclosure provisions

As part of the implementation of this Annex
the Parties will assess:

·
the need for capacity-building on the use of
public information for independent monitoring;

·
the need to raise public sector and stakeholder
awareness of the public disclosure provisions contained in this Agreement.

Appendix – Information to Reinforce
Verification, Monitoring and the Functioning of the TLAS

No || Document to be made publicly available || Agencies that hold the document || Information Category

TIMBER FROM FORESTS ON STATE-OWNED LANDS (IUPHHK-HA/HPH, IUPHHK-HTI/HPHTI,IUPHHK RE) and TIMBER FROM FORESTS ON STATE-OWNED LANDS MANAGED BY LOCAL COMMUNITIES (IUPHHK-HTR, IUPHHK-HKM)

1 || Forest Concession Rights Permits (SK IUPHHK-HA/HPH, IUPHHK-HTI/HPHTI, IUPHHK RE) || Ministry of Forestry (BUK); copies in district and provincial forestry offices || 3

2 || Concession Maps || Ministry of Forestry (BAPLAN); copies in district and provincial forestry offices || 3

3 || Production Forest Timber Utilisation Permits (SK IUPHHK-HTR, IUPHHK-HKm) || Ministry of Forestry (BUK); copies in district and provincial forestry offices || 3

4 || Production Forest Timber Utilisation maps || Ministry of Forestry (BAPLAN); copies in district and provincial forestry offices || 3

5 || Forest Use Plan (TGHK) || Ministry of Forestry (BAPLAN); copies in district and provincial forestry offices || 3

6 || Forest Timber Exploitation Work Plan (RKUPHHK) and annexes including equipment permit || Ministry of Forestry (BUK) || 3

7 || IUPHHK Permit Fee Payment Order (SPP) and payment slip ||  Ministry of Forestry (BUK) || 3

8 || Annual Work Plan (RKT/Blue Print) including map || Provincial forestry offices; copies in district forestry offices || 3

9 || Cruising and production reports (LHP and LHC) documents || District forestry offices; copies in provincial offices || 3

10 || Transport Documents (skshh) || District forestry office; copies in provincial forestry offices || 3

11 || Log reconciliation report (LMKB) || District forestry offices and local Ministry of Forestry unit (BP2HP) || 3

12 || Payment Order and slip for production fee (SPP) (by logs/volume) || District forestry offices || 3

13 || Payment receipt of Forestry Resource Fee and Reforestation Fund fee (PSDH or DR for licence holders of natural forests or PSDH for licence holders of plantation forests) || District forestry offices || 3

14 || Environmental Impact Assessment (EIA) documents (AMDAL, ANDAL, RKL and RPL) || Provincial or district environmental office (BAPEDALDA or BLH); copies in Ministry of Forestry (BUK) || 3

TIMBER FROM PRIVATE LAND

15 || Valid land title document || National or provincial/district land agency office (BPN) || 3

16 || Land title/location maps || National or provincial/district land agency office (BPN) || 3

17 || Log transport SKAU or SKSKB document stamped with KR (Community Timber) || Village head (SKAU); copies in district forestry offices (SKSKB-KR and SKAU) || 3

TIMBER FROM FOREST CONVERSION LAND (IPK)

18 || Timber utilisation licences: ILS/IPK including equipment permit || Provincial and district forestry offices || 3

19 || Maps annexed to ILS/IPK || Provincial and district forestry offices || 3

20 || Forest area release permit || Ministry of Forestry (BAPLAN) and Ministry of Forestry Provincial Unit (BPKH) || 3

21 || Work plan IPK/ILS || District forestry offices || 3

22 || Stand inventory data in state-owned forest land to be converted (section in IPK/ILS work plan) || District forestry offices || 3

23 || Timber production document (LHP) || District forestry offices || 3

24 || DR and PSDH payment receipt (see no. 13) || District forestry offices; copies in Ministry of Forestry (BUK) || 3

25 || Transport documents FAKB and the annexes for KBK and SKSKB and the annexes for KB || District forestry offices || 3

FOREST-BASED INDUSTRY

26 || Company Establishment Deed || Ministry of Law and Human Rights; for primary and integrated industry with capacity above 6000 m3 copies in Ministry of Forestry (BUK), with capacity under 6000 m3 copies in provincial and district forestry offices; for secondary industry copies in Ministry of Industry. || 3

27 || Business Licence (SIUP) || Local investment office or investment coordinating agency (BKPMD), Ministry of Trade. For secondary industry copies in Ministry of Industry. || 3

28 || Company Registration Number (TDP) || Local investment office or investment coordinating agency (BKPMD) and Ministry of Trade || 3

29 || Environmental Impact Assessment (EIA) (UKL/UPL and SPPL) || Provincial and district environmental offices (BAPEDALDA or BLH); copies in local trade office or investment coordinating agency (BKPMD) || 3

30 || Industrial Business Licence (IUI) or Industrial Registration Number (TDI) || Primary and integrated industry with capacity above 6000 m3 copies in Ministry of Forestry (BUK), with capacity under 6000 m3 copies in provincial forestry offices, with capacity under 2000 m3 copies in district forestry offices; for secondary industry copies in Ministry of Industry. || 3

31 || Industrial Raw Material Supply Plan (RPBBI) for Primary Forest Product Industries (IPHH) || Primary and integrated industry with capacity above 6000 m3 copies in Ministry of Forestry (BUK), with capacity under 6000 m3 copies in provincial forestry offices, with capacity under 2000 m3 copies in district forestry offices; copies in provincial and district forestry offices. || 3

32 || Forest Industry Product Registered Exporter (ETPIK) || Ministry of Trade || 3

33 || Transport documents (SKSKB, FAKB, SKAU and/or FAKO) || Village head (SKAU); copies in district forestry offices (SKSKB-KR, SKAU), copies of FAKO at provincial forestry offices || 3

34 || Documents reporting changes in round log stocks (LMKB/LMKBK) || District forestry offices || 3

35 || Processed Product Report (LMOHHK) || District forestry offices, copies to provincial forestry offices || 3

36 || Inter-island timber trade document (PKAPT) || Ministry of Trade (DG Domestic Trade) || 3

37 || Document showing ship identity || Local Port Administration Office (under Ministry of Transportation); copy in Indonesian Classification Bureau (BKI) || 3

OTHER RELEVANT INFORMATION

38 || Laws and regulations: all laws, regulations, standards, and guidelines listed in the legality standards || Ministry of Forestry, provincial or district forestry offices || 3

39 || Verification and Licensing information: || ||

(a) quality guidance and standard of procedures for accreditation || National Accreditation Body (KAN) || 1

(b) name and address of each accredited conformity assessment body (LP and LV) || National Accreditation Body (KAN) || 1

(c) list of personnel (auditors, decision makers) associated with each certificate || Conformity assessment bodies (LP and LV), Ministry of Forestry || 1

(d) clarification on what is considered commercially confidential information || Conformity assessment bodies (LP and LV) || 1

(e) audit plan to know when public consultations take place, announcement of audit by auditing body, public summary of audit result, recap reports by auditing body of certificate issuance || Conformity assessment bodies (LP and LV) || 1

40 || Status reports on audits: || ||

|| (a) certificates passed, failed, those currently in process, granted, suspended and withdrawn certificates and any changes to the above || Conformity assessment bodies (LP and LV) || 1

|| (b) cases of non-compliance relevant to audits and licensing and the action taken to deal with them; || Conformity assessment bodies (LP and LV) || 3

|| (c) Issued export licences (V-Legal Document); periodic reports from licensing body || Conformity assessment bodies (LP and LV) || 1

41 || Monitoring and complaint procedures: || ||

(a) standard operating procedures for complaints for accreditation body and each auditing body || National Accreditation Body (KAN), conformity assessment bodies (LP and LV) || 1

(b) civil society procedures for monitoring, complaints, reports from civil society monitor || Ministry of Forestry, Independent Monitor || 1

(c) documents to monitor the progress of complaint reports and resolution of complaint report || National Accreditation Body (KAN), conformity assessment bodies (LP and LV) || 3

Procedures to acquire information:

·
The Freedom of Information Act (UU 14/2008)
distinguishes four categories of information: (1) information available and
actively disseminated on a regular basis; (2) information that should be made
public immediately; (3) information that is available at all times and provided
upon request and (4) restricted or confidential information.

·
Information under category 3 of the Freedom of
Information Act is provided to the public upon request to the designated body
(PPID) within the respective institution, e.g. the Public Relations Centre of
the Ministry of Forestry. Each institution has its own implementing regulation
on public information, based on the Freedom of Information Act.

·
Some information, although falling under
Category 3 under the Freedom of Information Act is published on the websites of
the relevant institutions, inter alia: decrees and regulations, land
allocation maps, forest use plans.

[1]               COM(2003) 251.

[2]               OJ C 268, 7.11.2003, p. 1.

[3]               OJ L 347, 30.12.2005, p. 1.

[4]               Restricted Council document 15102/05.

[5]               OJ C [...], [...], p. [...].

[6]               COM(2003) 251.

[7]               OJ C 268, 7.11.2003, p. 1.

[8]               OJ C 157E, 6.7.2006, p. 482.

[9]               OJ L [...], [...], p. [...];
please insert the number, date and publication reference for the doc

[10]             OJ: please insert date of signature

[11]             Indicates main regulations, which also covers
subsequent amendments